The tax treatment of an IRA depends on the type of account. With traditional, SIMPLE, and SEP IRAs, contributions are tax-deductible, and you fund the account with pre-tax dollars, meaning you won't pay taxes until you withdraw money later on. With Roth IRAs, you contribute post-tax dollars — or money you've already paid income taxes on. This allows for tax-free withdrawals in retirement. "IRAs are either taxed at the beginning or the end," says Christy Matzen, director of financial planning at Zoe Financial. "When you make a contribution, you can pay tax on the dollars before you put it into the account — this will let you take the money out tax-free, or you can take a tax deduction when you make the contribution, but then the money will be taxed when you take it out."