The IRS Deductions Blog

Posts Tagged ‘non deductible ira contribution limits’

Question: Can I convert a non deductible IRA that has after tax 401K funds into a Roth in 2010 when income limits expire?

Answer: Dear Bobby: Great question, not many people have thought that far ahead. Why not? Look at IRS Pub 17 page 124 and it makes clear the procedure to follow when you convert a nondeductible IRA to a Roth. Obviously the $100,000 figure is a hurdle now for you and in 2010 that hurdle will be removed. Make sure to retain all documentation related to the origin of the IRA and the tax paid status on the funds. Remember you can keep that Roth going even after you reach age 70 1/2.

This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provide. Click on my profile to read more.
Errol Quinn Enrolled Agent Master Tax Advisor

Items on Amazon Right Now for Non Deductible Ira Limits:

Question: I am ineligible for Roth and can’t deduct traditional IRA contributions….?

My income is too high for a Roth IRA and I participate in a 401k so I’m I can’t deduct traditional IRA contributions. Is there any value in investing in a traditional IRA with a non-deductible contribution other than tax deferred growth?

Answer: Yes, since you will be able to convert to a Roth IRA in 2010 irrespective of your income, so there would be some value to starting now. This presumes that Congress doesn’t change the tax law eight more times in the next four years (not taking that bet).

Items on Amazon Right Now for Non Deductible Ira:

What to do after maxing out your 401(k)

Question: My wife and I have a combined annual income of about $250,000. If we max out our 401s, can we each still contribute the full $5,000 this year to a traditional deductible IRA rather than just investing the money through a normal taxable brokerage account? — Derek N., Colorado

Radio Diaries: 15 Years of Stories

Question: Can I still contribute to a non-deductible IRA (not traditional or Roth) now, and have it count towards 2008?

If so, what is the contribution limit for 2008? Are there any income limits associated with contributing to a non-deductible IRA?

Answer: Your IRA contribution limit for 2008 is 100% of earned income or $5,000, whichever is less. Taxpayers age 50 and older may contribute an additional $1,000. You may contribute to your IRA for 2008 until the tax-filing deadline (without extensions), in this case, April 15, 2009.

The deductibility of the contribution to a Traditional IRA is based on two factors: (1) whether the taxpayer is an active participant in a company retirement plan, and (2) the taxpayer’s Modified Adjusted Gross Income (MAGI). Please check with your professional advisors to see how these regulations apply to you.

Hope that helps.

Disclaimer. The information above is for general purposes only and is not be be construed as tax, legal, investment, or specific advice for any individual. Please consult with your professional advisors before you make any decisions regarding your finances.

Items on Amazon Right Now for Non Deductible Ira Contribution Limits:

Robert Powell: Eight ways to fix the U.S. retirement crisis

Paul Volcker and his troupe, the President’s Economic Recovery Advisory Board, are unlikely to appear on the “America’s Got Talent” stage any time soon. But retirement experts are giving the group, which just issued a 188-page plan to fix the nation’s complicated retirement system, mostly high marks for their effort.

Question: Can I convert a non deductible IRA that has after tax 401K funds into a Roth in 2010 when income limits expire?

Answer: Dear Bobby: Great question, not many people have thought that far ahead. Why not? Look at IRS Pub 17 page 124 and it makes clear the procedure to follow when you convert a nondeductible IRA to a Roth. Obviously the $100,000 figure is a hurdle now for you and in 2010 that hurdle will be removed. Make sure to retain all documentation related to the origin of the IRA and the tax paid status on the funds. Remember you can keep that Roth going even after you reach age 70 1/2.

This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provide. Click on my profile to read more.
Errol Quinn Enrolled Agent Master Tax Advisor

Items on Amazon Right Now for Non Deductible:

Clearwater Historical Society Seeking Enclosed Trailer

The Clearwater Historical Society is in great need of an enclosed trailer (preferably 10′ – 16′ long) to house fish fry equipment and free up precious room in the Historic Plumb House Museum needed for storage of archives, historical collections, etc. The Society, which receives no funding from the City of Clearwater, Pinellas County or the State of Florida, is a 501(c) 3 non-profit agency.

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