Adjusted Gross Income Ira
Question: If my adjusted gross income is less than $85,000 may I fund my 401(k) and my IRA to the max allowable?
401(k)-$15,500, plus $5,000 makeup for 2008, plus $6,000 contribution to IRA for 2008, which is $5,000 contribution, plus $1,000 makeup, for a total contribution of $26,500, plus an additional $6,000 for my non-working spouse into his IRA account
Answer: Yes, you can fund your 401(k) to the max. You may also fund your IRA to the max but it will not be deductible at your income level – but it is still allowable. But since it would not be deductible, it would probably be smarter to fund a Roth IRA which is allowed at your income level. And yes, you can max out both an IRA and a 401(k).
More help on converting regular IRAs to Roths
Readers had some good questions in response to my Sunday column on converting a regular individual retirement account into a Roth IRA. To recap: Starting this year, anyone can convert all or some of their regular IRAs into a Roth regardless of their income… Roth IRA – Individual Retirement Account – Retirement – Personal Finance – Tax
