nondeductible IRA
what is the limit for contribution for nondeductible IRAs? Is it 100% of your income up to 210,000, assuming you contribute to nothing else?
what is the limit for contribution for nondeductible IRAs? Is it 100% of your income up to 210,000, assuming you contribute to nothing else?
Permalink Submitted by Denise Appleby on Tue, 2008-06-24 21:23
I think you mean the [url=http://www.retirementdictionary.com/magi.htm%5DMAGI%5B/url%5Dlimit? .
The contribution limit is 100% of your taxable compensation, up to $5,000. $6,000 if you are at least age 50 by the end of the year.
If you are an active participant, then your eligibility for deducting your contribution is based on your MAGI and your tax filing status. The MAGI limits are available here http://www.retirementdictionary.com/active-participant.htm
If I misunderstood your question, please post
Permalink Submitted by [email protected] on Tue, 2008-06-24 21:28
i was trying to determine how much money an individual could put in a nondeductible IRA in 08 and 09 so that they could convert to a ROTH in 2010. Is the amount limited to the $5,000? Is there any way to get a large sum of money into a non-deductible over the next two years? Say for example if an individual makes $90,000 per year and participates in no plans, can he deduct more than $5,000?
Permalink Submitted by Alan Spross on Tue, 2008-06-24 23:03
No matter how much you make, 5,000 is the annual limit for IRA contributions, whether you can deduct them or not (6,000 if you have reached 50).
The only other way to contribute more money to an IRA is to rollover a former employer retirement plan. Most of those balances would be pre tax, but there could also be smaller amounts of post tax dollars in those plans, which you could rollover to an IRA. Starting this year, you may also be able to directly convert one of those plans to a Roth IRA, but the same 100,000 MAGI limit applies to those direct conversions until 2010.
Another possiblity to accumulate Roth assets without the income limit applying is a 403b or 401k employer plan that offers a Roth option. If your employer has such a plan, ask if or when a Roth option might be available.