I don’t think you’re correct about the Roth contribution restrictions being lifted. It says on page 2 that you are ineligible to contribute to a Roth if your (married) income is greater than $177k. The only thing that’s changed in 2010 is the the conversion loophole.
hmmm…i don’t see this on the IRS website. plus i would have thought this would have gotten a lot more press than it has if it was true. are you sure CONTRIBUTIONS have no income limits anymore? CONVERSIONS, yes, this has been publicized much, but CONTRIBUTIONS to Roth? I don’t think so.
You got me excited, but you are wrong. From the IRS publication you link:
What’s New for 2010
Modified AGI limit for Roth IRA contributions in- creased. For 2010, your Roth IRA contribution limit is reduced (phased out) in the following situations.
• Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $167,000. You cannot make a Roth IRA contribution if your modified AGI is $177,000 or more.
• Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2010 and your modified AGI is at least $105,000. You cannot make a Roth IRA contribution if your modified AGI is $120,000 or more.
As other commenters have pointed out, the post is COMPLETELY WRONG.
Page 56 of IRS Pub 590: “your Roth IRA contribution limit is reduced (phased out) in the following situations: …” married filing jointly and AGI is greater than $177k or more, and single (or other tax filing status) and AGI is $120k or more.
HOWEVER, a person can make a non-deductible IRA contribution AND THEN convert that non-deductible IRA to a Roth, at any income level.
Assuming this is true (which, from the previous comments, it does not seem to be) would those with higher incomes actually benefit from a Roth IRA, considering their income puts them in a higher tax bracket which they have to pay up front? Aren’t the benefits of a Roth most when you’re in a lower tax bracket now than you will be when you withdraw?
Can You Contribute to a Roth IRA?
Generally, you can contribute to a Roth IRA if you have taxable compensation (defined later) and your modified AGI (defined later) is less than:
· $176,000 for married filing jointly or qualifying shown on Form 8839.
· $120,000 for single, head of household, or married filing separately and you did not live with your spouse at any time during the year, and
· $10,000 for married filing separately and you lived come, such as your deduction for medical and dental
with your spouse at any time during the year.
OK. So I am not eligible for Roth in 2010. But If I contribute to IRA for 2009 now and then convert it to Roth, since I will have no gains, since I contributed in the IRA with already taxed money, Will I have to pay something or this will be a completely free process ?
Anybody else leaving an existing Traditional IRA alone??
I have one from several years ago and I’m leaving it alone. It’s not much but just in case the whole Roth thing goes sour a couple decades from now, I’d like to know I “diversified” my IRA’s like I “diversified” my portfolio!!!
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