The core difference between Roth IRAs and traditional IRAs lies in the timing in which you are able to exercise your tax benefits. When you open a traditional IRA, you do not pay taxes on any amount contributed – you are taxed on future withdrawals. On the other hand, Roth IRAs allow you to make tax-free withdrawals in the future at the expense of taxation on contributions. In other words, contributions made to Roth IRAs do not decrease your end-of-year taxable income like those made to traditional IRAs.