2010 contributions to a ROTH IRA
Can a high income client make new contributions to a ROTH IRA in 2010?
If they are restricted because of income, can they make a non deductible IRA contribution and then convert to their ROTH?
Can a high income client make new contributions to a ROTH IRA in 2010?
If they are restricted because of income, can they make a non deductible IRA contribution and then convert to their ROTH?
Permalink Submitted by Alan Spross on Thu, 2010-02-25 21:25
Regular Roth contributions have income phaseouts beginning at 105k MAGI for a single and 167 MAGI for married filing jointly. For incomes higher than this, the only option is a non deductible TIRA contribution reported on Form 8606.
These contributions can then be converted to a Roth with no tax due, but only if this is the only TIRA balance. If taxpayer has other TIRA accounts, the 8606 basis % must be pro rated over all accounts, and that would make the conversion mostly taxable.