PRINT
EMAIL
COMMENT
BUZZ UP
DIGG THIS- Stock Watch - Five Stocks With Super Yields
- Fund Watch - A Disastrous Year for the Kiplinger 25
- Starting Out - 12 Things I'm Thankful For
- Value Added - A Bear Turns Bullish
- Cash in Hand - It's Time to Buy Bonds
- Money Smart Kids - Misconceptions About Investing
- Drive Time - Should You Buy a Detroit Car?
- On the Job - 13 Hot Jobs in Hard Times
- Tax Tips - Winning With Losers
- More
My wife and I gross more than $190,000 in income. But after 401(k) contributions and other adjustments, I think we are below the max of $160,000 to contribute to a Roth IRA. How do I know for sure? Is there a line on my 1040 that tells me?
The key figure for Roth IRA eligibility is your "modified adjusted gross income," which is your adjusted gross income -- the last line on the first page of your 1040 -- with a few adjustments. Add back to your income any deduction you had taken for IRA contributions, student loan interest, bond interest used for college costs, employer-provided adoption benefits and a few others (see IRS Publication 590 Individual Retirement Arrangements for a full list and worksheet). Subtract any income that came from converting a traditional IRA to a Roth.
And the AGI itself doesn't include money that had already been deducted from your paychecks, such as pretax money you contributed to a 401(k) or flexible-spending account. In your case, it seems to make the difference. Married couples filing jointly can contribute up to $5,000 each to a Roth IRA in 2008 (or $6,000 if 50 or older) as long as their modified adjusted gross income is less than $159,000. You'll be able to make a partial contribution if your income is less than $169,000 (Publication 590 includes a worksheet to help with these calculations, too).
Reprint Article
