IRA rothIRA question

Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date IRA rothIRA question learnfpga@gmail.com 03-17-2008  Re: IRA rothIRA question joetaxpayer 03-17-2008  Re: IRA rothIRA question Elle 03-17-2008  Re: IRA rothIRA question BreadWithSpam 03-19-2008
Posted by learnfpga@gmail.com on March 17, 2008, 12:00 pm Here is my situation..... I am 30 yrs old married and file my returns jointly. I had 401K through my employer in 2007 but my wife did not. So my understanding was that I can put $8K (Tax deductible traditional IRA + rothIRA) for my wife. Also I can put $4K (rothIRA) for me. In total $12K for year 2007. However Vangaurd says as a couple we can only put $8K. I am not doubting Vangaurd but confounded because other websites I go to they calculate that I can put in upto $12K. Our combined salary is below 150K and no dependents. Thanks for any responses..... -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by joetaxpayer on March 17, 2008, 12:26 pm learnfpga@gmail.com wrote: > Here is my situation..... > > I am 30 yrs old married and file my returns jointly. I had 401K > through my employer in 2007 but my wife did not. So my understanding > was that I can put $8K (Tax deductible traditional IRA + rothIRA) for > my wife. Also I can put $4K (rothIRA) for me. In total $12K for year > 2007. First, I trust your wife is under 50 as well. You may deposit only 2 x $4000 to IRAs. Since you are above the limit to deduct a regular IRA, you should choose the Roth. But again, the maximum is $4000 per person (for 07. In 2008 it's $5000, with an extra $1000 for those 50 or older.) Joe www.blog.joetaxpayer.com -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by Elle on March 17, 2008, 3:20 pm > Vangaurd says as a couple we can only put $8K. I am not > doubting Vangaurd but confounded because other websites I > go to they > calculate that I can put in upto $12K. What other web sites? Google for {IRA limits} and many sites turn up indicating that the total of your wife's contributions to a Roth and Traditional IRA cannot exceed $4k. The same limit applies to you. Hence a total of $8k is permitted for both you and your wife to all your IRAs. E.g. http://beginnersinvest.about.com/cs/iras/a/iracontribution.htm http://en.wikipedia.org/wiki/Individual_retirement_account#Funding -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Posted by on March 19, 2008, 3:14 pm > I am 30 yrs old married and file my returns jointly. I had 401K > through my employer in 2007 but my wife did not. So my understanding > was that I can put $8K (Tax deductible traditional IRA + rothIRA) for No. You may put a max of $4k in the *combination* of your Roth and Traditional IRAs. > my wife. Also I can put $4K (rothIRA) for me. In total $12K for year > 2007. Nope. Total for two people - all all Roth + Traditional IRA contributions - is $8k. > However Vangaurd says as a couple we can only put $8K. I am not > doubting Vangaurd but confounded because other websites I go to they > calculate that I can put in upto $12K. The other websites are wrong (which are they?). Vanguard's right. See page 60 of the IRS's Publication 590 which explains the Roth IRA limits: ...your contribution limit for Roth IRAs generally is the same as your limite would be if contributions were made only to Roth IRAs, but then reduced by all contributions for the year to all IRAs other than Roth IRAs. Employer contributions under a SEP or SIMPLE IRA plan do not affect this limit. http://www.irs.gov/pub/irs-pdf/p590.pdf -- Plain Bread alone for e-mail, thanks. The rest gets trashed. No HTML in E-Mail! -- http://www.expita.com/nomime.html Are you posting responses that are easy for others to follow? http://www.greenend.org.uk/rjk/2000/06/14/quoting -------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup. Similar Threads Posted IRA question January 8, 2007, 5:00 am 529 question January 11, 2007, 4:41 pm TVM Question, please help February 8, 2007, 4:33 pm S.S. 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