Max income for IRA?
01-31-2008, 07:22 PM
#1
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Max income for IRA?
I think the max income for married filing joint is $160,000.
But, is that gross income, taxable income, etc, i.e., is non-taxable income included in that number?
I'm going to be hit with sep pay that will put me over $160,000 total, but might be able to offset it by taking a few months tax free "vacation" to get me back under $160,000 taxable.
But, is that gross income, taxable income, etc, i.e., is non-taxable income included in that number?
I'm going to be hit with sep pay that will put me over $160,000 total, but might be able to offset it by taking a few months tax free "vacation" to get me back under $160,000 taxable.
02-01-2008, 09:54 AM
#2
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Joined APC: Jul 2006
Posts: 70
There is no income limit for an IRA. Everyone with earned income, and everyone who's spouse has earned income, can contribute to an IRA. The income limits only determine what kind of IRA contribution you can make--Traditional (deductible or non-deductible) or Roth.
The limits change each year so it's always a good idea to do a search such as "2007 IRA income limits" to what the limits for the year in question. Here's a link I found that seems to cover most of the current rules for 2007 and 2008.
http://www.money-zine.com/Financial-...bution-Limits/
The income limit is based on Adjusted Gross Income. Here is a description of AGI:
The limits change each year so it's always a good idea to do a search such as "2007 IRA income limits" to what the limits for the year in question. Here's a link I found that seems to cover most of the current rules for 2007 and 2008.
http://www.money-zine.com/Financial-...bution-Limits/
The income limit is based on Adjusted Gross Income. Here is a description of AGI:
Adjusted Gross Income or AGI is the term used primarily by the Internal Revenue Service to describe a taxpayer's gross income less a set of standard adjustments to that income. Adjustments that are made to gross income include things such as moving expenses, alimony, tax penalties on early withdrawals, and contributions to an individual retirement accounts.
The adjusted gross income has become a standard measure for the IRS to determine eligibility for other beneficial programs such as IRAs and earned income credits. The adjusted gross income is usually reported on line 35 of the tax return or Form 1040.
The adjusted gross income has become a standard measure for the IRS to determine eligibility for other beneficial programs such as IRAs and earned income credits. The adjusted gross income is usually reported on line 35 of the tax return or Form 1040.
02-01-2008, 12:12 PM
#3
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Joined APC: Jun 2006
Posts: 135
There are limits on a traditional IRA as far as tax deductions. You can still contribute to a Traditinal IRA no matter what you make, but you may not be able to deduct any or all of it. In 2010, you will be given a one time opportunity to transfer a traditional IRA to a roth no matter what your income is. You will be given the opportunity to pay the taxes owed over a 5 year period. So, Even if taxes are not deductible now for a traditional, still contribute to it and transfer to the roth in 2010.
The income limitations are based on Adjusted Gross Income.
There are several factors you have to look at to determine what you can deduct. Are you and/or your spouse covered by a retirement plan at work? Do you file single, married filing jointly, or married filing seperately?
here is an example of you being covered by an employer sponsored retirement plan, married filing jointy for 2007.
Full deduction for less than $83000 Adjusted Gross Income (AGI)
Partial deducion $83000 - $103,000
No deduction greater than $103,000
For 2008, if you are not covered by a retirement plan at work and you are single, or you are married and neither you or your spouse are covered by a plan at work, there is no deductable limits. If you married filing jointly and your spouse is covered, you are limited to $159,000 before theh phase out starts.
You can PM me with your specific situation and I can give you an exact answer.
The income limitations are based on Adjusted Gross Income.
There are several factors you have to look at to determine what you can deduct. Are you and/or your spouse covered by a retirement plan at work? Do you file single, married filing jointly, or married filing seperately?
here is an example of you being covered by an employer sponsored retirement plan, married filing jointy for 2007.
Full deduction for less than $83000 Adjusted Gross Income (AGI)
Partial deducion $83000 - $103,000
No deduction greater than $103,000
For 2008, if you are not covered by a retirement plan at work and you are single, or you are married and neither you or your spouse are covered by a plan at work, there is no deductable limits. If you married filing jointly and your spouse is covered, you are limited to $159,000 before theh phase out starts.
You can PM me with your specific situation and I can give you an exact answer.
Last edited by beechbum; 02-01-2008 at 12:17 PM.
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