limit on compensation for making regular Roth contribution?

Submitted by Shahpar Naghshineh on Wed, 2010-03-24 14:29

Hello,

what is the limit of compensation made to allow for regular contributions to Roth in 2010. I know there is no compensation limit for Roth conversion in 2010 but what about compensation limit for making regular contribution to Roth.

Does a conversion to a Roth counts as income towards the modified AGI?

I appreciate an answer.



Submitted by mk foss on Wed, 2010-03-24 18:10

A full Roth contribution can be made in 2010 with modified AGI up to $167,000 married and $105,000 single. There is a $10k phase out range above those amounts where a partial deduction is allowed. The other limit is earned income, you must have earned income of $5,000 or more ($6,000 if over 50) to contribute the maximum. If one spouse is working and makes at least $10k – that will support two $5,000 deductions.

Roth conversion income is not part of modified AGI for determining whether a contribution is allowable.

Submitted by Edward Czapor on Wed, 2010-03-24 19:07

You can work around the income limits for Roth contributions by contributing to non-deductible TIRA’s first, and then converting to a Roth. There are no income limits for non-deductible contributions to a TIRA and conversion can be done as soon as possible which would make the conversion tax free if no other TIRA’s.

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