Friday, November 04, 2005

2005 Tax Year IRA information

Question: Can I contribute to a traditional IRA if I have other retirement plans?
Answer: Yes, you can contribute to a traditional IRA whether or not you are covered by another retirement plan. However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer-sponsored retirement plan.
Also, note that contributions to a Roth IRA are not deductible and income limits apply.] See Publication 590 for further information.
Their is an effect if You Are Covered by a Retirement Plan at Work. If you are covered by a retirement plan at work, use the IRS tables to determine if your modified AGI affects the amount of your deduction.

IF your filing status is .(fill in status a,b,or c below).. AND your modified adjusted gross income (modified AGI) is ...
THEN you can take ...
(a) single or head of household(filing status) $45,000 or less a full deduction. OR more than $45,000 but less than $55,000 a partial deduction. $55,000 or more no deduction.
(b) married filing jointly or qualifying widow(er) $65,000 or less a full deduction.
more than $65,000 but less than $75,000 a partial deduction.
$75,000 or more no deduction.
(c) married filing separately 2 less than $10,000 a partial deduction.
$10,000 or more no deduction.

1 Modified AGI (adjusted gross income). 2 If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the ?Single? filing status).