Roth income eligibility 2010
I’ve heard that the phase out ranges for Roth conversions go away in 2010, but are there still income limits on new contributions in 2010? e.g. I make $250k in 2010, can I make a Roth contribution in 2010?
I’ve heard that the phase out ranges for Roth conversions go away in 2010, but are there still income limits on new contributions in 2010? e.g. I make $250k in 2010, can I make a Roth contribution in 2010?
Permalink Submitted by Alan Spross on Mon, 2009-07-13 17:59
Yes, there are still inflation adjusted limits for new REGULAR Roth contributions in 2010 and beyond. This means that higher income taxpayers will have to fund their Roths by conversions or Roth 401k regular contributions.
Alternatively, in your case, you can always make a non deductible TIRA contribution regardless of high earnings, and then convert it to a Roth IRA immediately starting in 2010. The taxable amount of the conversion would be based on pro rate rules, so would only be fully tax free if you do not have other pre tax TIRA accounts.
Permalink Submitted by Al Fry on Mon, 2009-07-13 18:06
Of course for the non-deductible TIRA, you have to be under age 70.5, whereas any age for the Roth.
Permalink Submitted by Alan Spross on Mon, 2009-07-13 18:45
Good point, Al. I have to remember that many more people will now be working well into their 70s, many out of necessity. And that means taxable SS income will add to the modified AGI that limits regular Roth contributions. Another reason to consider increasing the MAGI limit?