Contributions to a Roth IRA are not deductible. However,
the trade-off from the loss of a tax deduction are two big tax benefits:
These two tax benefits are available to all holders of Roth IRAs, as long as the account holder has one Roth IRA that is at least six years old. Similar to other IRAs, annual contributions can't exceed $5,500 for 2015 and 2016. You are entitled to an additional $1,000 contribution if you are over 50 years old at year end. In all cases, maximum contribtuions to IRAs are limited to total earned income.
Non-working spouses are entitled to IRA contributions based upon their spouse's earned income as long as a joint tax return is filed.
Your eligibility to make a current year's contribution to a Roth IRA depends upon your income level and filing status. Full ROTH IIRA contributions are allowed if your total inocme falls below the following income levels:
If your total income exceeds the preceeding income levels, your maximum ROTH IRA contribtion gets reduced.
If your filing status is married filing separately, you generally cannot make a contribution to a ROTH IRA.
If you meet certain requirements, you can transfer all or part of your present holdings from a traditional IRA into a Roth IRA; the transfer will trigger the same income as a taxable distribution. However, the transfer will be exempt from the 10% early distribution penalty and any Illinois income tax. In order to transfer assets from a regular IRA to a Roth IRA you must meet two requirements for the year:
Conversions of traditional IRAs into Roth IRAs can be costly unless done correctly; therefore, professional advise is recommended.To contact me or return to a different page, use the links on the left hand side of this page.