IRA Contribution Rules

The deadline to contribute to your Roth or Traditional IRA for the tax year 2010 is April 17, 2012. You can contribute $5,000 or the amount of earned income for the year, whichever is less. If you’re over 50, you can contribute an additional $1,000.

Your income determines if you qualify for a tax-deductible Traditional IRA contribution, or if you qualify to make a Roth IRA contribution.

Do you qualify to deduct your Traditional IRA contribution?
 If your income is less than the beginning of the phase-out range, you qualify.  If your income is over the phase-out range, you do not.  If your income falls inside the range, you partially qualify.
  Modified Adjusted Gross Income                                         Phase-OutRange
Single, participates in an employer-sponsored retirement plan $56,000 – $66,000
Married, participates in an employer-sponsored retirement plan $90,000 – $110,000
Married, your spouse participates in an employer-sponsored retirement plan, but you do not. $169,000 – $179,000
 
Do you qualify to contribute to a Roth IRA?
Single $107,000 – $122,000
Married, filing jointly $169,000 – $179,000

 

Harli L. Palme, CFA, CFP®

Financial Advisor

 

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