Tips to Share with your clients: Did you know you have until April 15th to contribute to your IRA (ROTH or Traditional) contribution for 2010?
February 4, 2011 Leave a comment
Fred Solomon, from Solomon Financial Mortgage shares IRA contribution information for 2010/2011.
In speaking with my clients and friends, this topic comes up this time of year. According to http://www.money-zine.com/Financial-Planning/Retirement/Roth-IRA-Contribution-Limits/
Traditional & Roth IRA Compensation Limits
As mentioned earlier, the first contribution limit we’re going to talk about has to do with compensation. To be eligible for a Roth IRA contribution in a given calendar year, you need some form of compensation. But there is also an income limit for contributions. If your adjusted gross income exceeds these limits, then you are no longer eligible to contribute to a Roth IRA.
In 2010 and 2011, the adjusted gross income limits are:
Single filers, Head of Household or Married Filing Separately (and you did not live with your spouse during the year) with modified adjusted gross income up to $105,000 ($107,000 in 2011) can make a full contribution. Contributions are phased-out starting at $105,000 (or $107,000 in 2011) and you cannot make a contribution if your adjusted gross income is in excess of $120,000 ($122,000 in 2011).
Joint filers with modified adjusted gross income up to $167,000 ($169,000 in 2011) can make a full contribution. Once again, this contribution is phased-out starting at $167,000 ($169,000 in 2011) and you cannot make a contribution if your adjusted gross income is in excess of $177,000 in 2010 or $179,000 in 2011.
If your tax filing status is Married Filing Separately (and you live with your spouse), then you cannot make a Roth IRA contribution if your AGI is in excess of $10,000.
Traditional & Roth IRA Contribution Limits for 2011
Traditional & Roth Contribution Table
2011$5,000
2012$5,000 plus Inflation
Roth IRA Catch-Up Limits
In addition to the “standard” contribution limits shown above, taxpayers age 50 and over by December 31st are eligible to make a Roth IRA catch-up contribution. Once again, the table below outlines these catch-up contributions for the last several years as well as those for the next couple of years:
Roth Catch-Up Contributions Table
2011$1,000
2012$1,000 plus Inflation
Roth IRA Contribution Example
Keep in mind that these catch-up contributions are in addition to the “normal” Roth IRA contribution limit. For example, in 2010 and 2011 you can make a contribution of $5,000. But if your age 50 and over by year’s end, you can make an additional catch up contribution of $1,000, making your total contribution $6,000.
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