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Originally Posted by ward
you can't put into a roth IRA if you make over a certain amount of dollars,
I think it's in the mid 80 grand a year range
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For a Roth IRA you have the same contribution amount as a traditional 2005--2007 was 4000 under 50 and a $500 catchup over 50 it will be $1000 begining in 2006...For those that dont understand the diffrence a traditional you can deduct the amount on your taxes, but you pay taxes on whatever you take out when you start withdrawaling at 59 1/2 and no controbutions may be made after 70 1/2..
A Roth however you may not deduct from your taxes, but when you start taking money at say 59 1/2 you pay no taxes..which can be a huge tax break for some of us...also you may keep making controbutions after 70 1/2 if you still have a w-2...
You are correct about the if you make over a certain amount you cannot contribute to a roth and must go with a traditonal i have been restricted to this personally...the amount however depends on your Adjusted Gross Income which is found near the bottom of page 1 on your 1040...for someone
$150,000 to $160,000: Married Filing Jointly
$0 to $10,000: Married Filing Separately (and you lived with your spouse at any time during the year)
$95,000 to $110,000: Single, Head of Household or Married Filing Separately (and you did not live with your spouse)
Now you might ask what the gap means, the lower of the two numbers is the max to be able to make a full cont say for 2005 Age 35 4000 would be the max...the higher of the number is when its no longer allowed at all and you must go with a traditional..now the diffrence in between the two the IRA allows a partial cont.
So my advice to all of you that have a 401k at work contribute to that first...then your IRA..and no matter what if you have the money contribute to a IRA...if you have any specific questions feel free to ask away this is one of the main things I specialize in, but typically not Roth since most of the clients are unable to qualify...