|
|
|
|
Home / Services / Calculators / Newsletter / Archives Individual Retirement Accounts The allowable contribution to an IRA has been raised to $3,000 for the years 2002, 2003, and 2004 for taxpayers under the age of 50. Taxpayers 50 years old or older may contribute $3,500. These limits apply to regular and Roth IRAs. A new credit is available for contributions to a regular IRA, a Roth IRA, and certain other retirement accounts for the years 2002 through 2006. This credit can be as high as 50% for taxpayers filing a joint return with adjusted gross income less than $30,000 or a separate return with adjusted gross income less than $15,000. The credit is 20% for joint returns with adjusted gross income between $30,000 and $32,499 and separate returns with adjusted gross income between $15,000 and $16,249. The credit is 10% for joint returns with adjusted gross income between $32,500 and $49,999 and separate returns with adjusted gross income between $16,250 and $24,999. The credit is 0% for joint returns with $50,000 or more of adjusted gross income and separate returns $25,000 or more of adjusted gross income. This credit will mean that a taxpayer filing a joint return with less than $30,000 adjusted gross income will save $1,000 in taxed by contributing $2,000 to his nondeductible Roth IRA. This is a tremendous incentive to contribute to your retirement plan. Taxpayers who are active participants in their employer's qualified retirement plan and file a joint return can make a deductible IRA contribution as long as their adjusted gross income is less than $54,000 and a partial deduction is allowed until their adjusted gross income reaches $64,000. For single taxpayers the adjusted gross income limits are between $34,000 and $44,000. Contributions to a nondeductible Roth IRA are limited to taxpayers filing a joint return with adjusted gross income is less than $150,000 and it is limited if their adjusted gross income is under $160,000. If married taxpayers file separate returns the adjusted gross income limit is $10,000. Single taxpayers may contribute as long as their adjusted gross income is less than $95,000 and it is limited if their adjusted gross income is less than $110,000. These various limitations are very confusing and required obtaining expert advise from your tax advisor. You should either meet with your tax advisor prior to the end of the year or wait until your tax return is prepared to determine the maximum contribution allowable. (November, 2002 Newsletter)
James E. Newland, CPA 939 Center Road Eastlake, Ohio 44095 440-951-9799 |
|
Send mail to
webmaster@newlandcpa.com with questions or comments about this web site.
|