Latest responses to “Traditional and Roth IRA Contribution Limits and Income Phase Outs” Copyright 2012, MoneyBlueBook.com 463840 2010-11-17T18:53:39-08:00 Darryl I contributed 5k to my ROTH IRA early in 2010, assuming I would have "earned income". So far, I only have unemployment income and taxable income from converting a 401k to a ROTH IRA. 1) Is the 401k to ROTH rollover considered "earned income" so that I am eligible to contribute to the ROTH? 2) If not, is my 5k subject to the 6% excess contribution tax? 3) Can I "get my 5k out" of the ROTH (reverse) the contribution and avoid the 6% penalty? If so, how do I calculate the "growth" of the 5k since I contributed? 463830 2010-07-10T18:13:03-07:00 Michael D My wife and I are both 1099 independent contractors. I have an i401k. Can both of us contribute the max to an IRA? ie...$10000 463820 2010-02-10T22:23:07-08:00 john agnoletti what is the thinking behind married filing separately deduction phaseout at $10,000 AGI? Seems so low compared to the other AGI thresholds. Just wondering? Any logical reason for this? 463780 2009-09-25T15:42:27-07:00 Charles W. My confusion is about the traditional IRA contribution. If there is no income limit except that for the purpose of taking the taxable deduction, how is the taxable value determined at the time of the withdrawl? In other words, If I have an income of $90,000, filing as single,I am allowed no deduction for a traditional IRA. If I contribute to one anyway, I have already paid tax on that money. Say it goes up 25% and I want to start taking withdrawels at age 60+. Won't I be charged again for taxes on the original cost? If not, how is that handled? 463810 2009-09-17T01:33:11-07:00 Pete Everything that the US government came up are so complicated. This is basically an insult to our intelligence and created a huge over head. I think America is digging its grave and bury herself in it very soon. The world will leave America behind. 463800 2009-07-18T07:04:24-07:00 Quentara 2009 Married Filing Jointly (Spouse Covered) No Income Limit 2009 Married Filing Jointly (Spouse Not) $166,000 to $176,000 that seems backwards to me? 463790 2009-01-29T12:17:00-08:00 M D Franklin I file as single, head of household. For the first time in years, I have a 401k plan at work, to which I contributed minimally throughout 2008. I will be 52 soon. I have a traditional IRA. My income from all sources will be under $50K for 2008. Please confirm that I can contribute deductible IRA of $6,000 for tax year 2008. Thank you. 463750 2008-10-31T11:11:51-07:00 Kath I withdrew some money from my IRA several years ago due to hardship. At that time I was not working. I was sick and I needed money to pay rent. Bank told me about possible penalty but I never got any papers about this. Would it be possible, that IRS did not penalize me or is there a fine waiting somewhere for me? 463770 2008-09-25T20:33:37-07:00 john Hello, I am covered by a pension and a 457 (b) plan. My W-2 #14 box is checked under Retirement. I am married and our MAGI is approx $180,000. I already contributed to a ROTH $10,000 total (wife and I) and need to change the contribution. I am under the impression that I cannot benefit from the deduction on my taxes if $10K is moved from ROTH to Traditional. Is that correct? Would it be more beneficial to up my annual contribution by the amount I would have contributed to an IRA so I can benefit from the tax benefit? Thanks for your help. 463740 2008-07-18T13:33:27-07:00 Raymond Kim, I think you are getting two similar traditional IRA components mixed up. You are confusing "income limits pertaining to the right to contribute to an IRA account at all" to "income limits pertaining to the right to take an IRA deduction". There is no income restriction or cap limit to the ability to contribute to an IRA retirement account. However, there is indeed income limitations to one's ability to take an IRA tax deduction. Higher incomes precludes one from enjoying an IRA deduction on one's income tax return. I made a slight change to the article wording to make it a bit more clear...thanks for your commentary!