Who Can Establish a Roth IRA?
Anyone who has taxable compensation or self-employment income for the year may establish and fund a Roth IRA. But whether or not you can contribute and the amount of your contribution limit depends on your marital status and whether your compensation falls within modified adjusted gross income (MAGI) requirements:

Contribution Guidelines
You can set up a Roth IRA anytime. However, your contribution for any year is limited. For any tax year, you may contribute the lesser of the regular contribution limit or 100% of your compensation (or earned income). Compensation/earned income includes wages, salaries, bonuses, tips, professional fees, commissions, self-employment income, or alimony. If you earn less than the maximum contribution limit in annual compensation, you may contribute up to as much as you earn. For any year you do not work, contributions cannot be made to your Roth IRA unless you receive alimony or file a joint return with a spouse who has compensation. If you reached age 50 by the end of a year, you may contribute an additional catch-up contribution amount. Contributions can be made after you reach 70 1/2 and amounts can be kept in a Roth IRA as long as you live. You can make a contribution to a Roth IRA at any time during the year, or by the due date of your tax return. The contribution limit depends on whether contributions are made only to Roth IRAs or to both Traditional and Roth IRAs . The following chart outlines current contribution limits:

Spousal IRA Contribution
You may contribute to a spousal Roth IRA on behalf of your non-working spouse who makes little or no income. Spousal Roth IRAs are subjected to the same rules and limits as that of regular Roth IRA participant contributions. The spousal Roth IRA must be held separately, as Roth IRAs cannot be held as joint accounts. Of course, in order for you to make a spousal Roth IRA contribution, you and your spouse must file a joint income tax return. Your combined contribution should not be more than the amount of compensation you report on your tax return.

Contribution Deadline
Roth IRA contributions must be made by April 15. If April 15 falls on a weekend, the deadline is the next business day. Contributions postmarked on or before April 15 are considered to be made by the deadline.

Making Your Contribution After You File Your Tax Return
Your contribution can be made at any time between January 1 and April 15 of the following year even if you filed your income-tax return before April 15. Make sure you tell your IRA trustee/custodian which year the contribution is for.

Roth Conversion
A  conversion is a taxable and reportable movement of assets from a Traditional, SEP or SIMPLE IRA to a Roth IRA. SIMPLE IRA assets cannot be converted to a Roth IRA until two years after the employer first made a contribution to the individual's SIMPLE IRA. Conversion methods from a Traditional IRA can be made in the form of a rollover, firm-to-firm transfer or with your existing IRA custodian. If the conversion method fails because you expected of have modified AGI of less than $100,000 and a filing status other than married, and filing separately, there are tax consequences. A failed conversion is a distribution from the Traditional IRA, and an improper contribution to a Roth IRA. As such, the distribution may be subject to full income tax in the year of the failed conversion, and may also be subject to a 10% early distribution penalty (unless an exception enumerated in Internal Revenue Code Section 72(t) applies). In addition, a 6% annual excise tax on excess contributions to a Roth IRA may apply. This tax is imposed every year until the excess contribution is withdrawn.

You may recharacterize your Roth IRA conversion by directly transferring the amount converted (including all net earnings from the date of conversion) back to a Traditional IRA. You may do this prior to the due date, including extensions, for filing your tax return. Show the conversion on Form 8606. Refer to the Form 8606 Instructions for information on reporting recharacterizations.

Distributions
If you own a Traditional IRA, you're required to begin taking distributions at age 70 1/2. This rule doesn't apply to Roth IRAs. You're never required to take distributions from your own Roth IRA. However, if your estate includes Roth IRA assets after your death, your beneficiaries will have to take required minimum distributions.

The rules for Roth IRAs also permit you to do something that isn't allowed for Traditional IRAs: withdraw the nontaxable part of your money first. Distributions from Traditional IRAs come partly from earnings and partly from contributions. But when you take money out of a Roth IRA, the first dollars you take out are considered to be a return of your non-rollover contributions. You don't have to meet any special tests to receive those dollars free of tax. You can take them out any time, for any reason, without paying tax or penalties.

In some cases you will pay taxes or penalties if you withdraw money too soon, but the tax law never prohibits you from taking money out of the IRA. If you need early access to that money, you're generally in better shape with a Roth IRA than with a Traditional IRA. As noted above, you're allowed to withdraw your non-rollover contributions at any time without paying tax or penalty. This is not the case for the earnings, however. There is also an exception to the rule that contributions come first when you withdraw money from a Roth IRA. When you withdraw excess contributions (contributions that are not permitted, or contributions that are larger than permitted) you may be required to withdraw earnings attributable to those contributions.

Qualified vs. Non-Qualified Distributions
Qualified distributions from a Roth IRA are not includible in income or subject to the 10% IRS imposed early withdrawal penalty.  A qualified distribution is a distribution to an owner after the owner has reached age 59 1/2 (or who is disabled, a first-time home buyer, or in the case of a beneficiary of the estate, death) and the Roth IRA has been funded for a five-year period, beginning on the first day of the tax year in which a conversion from a regular IRA is made or for which a contribution is made, and ending with the last day of the fifth year from the beginning year.

If a distribution does not meet the conditions of a qualified Roth distribution (defined above), then the distribution is a non-qualified distribution.

Nonqualified Distributions
A non-qualified distribution from a Roth IRA may be subject to a10% IRS imposed tax penalty for early distributions, provided that no exceptions apply. The amount subject to the additional tax depends on the amount of the distribution, basis in contributions, basis in conversions, years in which conversions were made, and the amount of earnings. As a general rule, returns of regular contributions and returns of conversion contributions that were held in the IRA account for five years are not subject to the 10% penalty. However, returns of conversion contributions that were not held in the IRA account for five years, and earnings, are subject to the 10% early distribution tax. The following exceptions apply to the early withdrawal penalty:

For more information, consult the Department of Treasury, Internal Revenue Service Publication 590 Individual Retirement Arrangements IRAs listed under Publications.