Retirement

With April 18th (usually April 15th) coming up, now is a good time to look at your retirement plan to see if you have maximized contributions and minimized taxes.

Can you set up a Traditional IRA?

Yes if:

• You (or, if you file a joint return, your spouse) received taxable compensation during the year (only one of you need to have compensation but must exceed $10,000 if only one person is working), and
• You were not age 70½ by the end of the year.

A traditional IRA can be set up even if you or your spouse are covered by a retirement plan at work. However, this might limit the amount of contribution deductible on your taxes.

 Phaseout

For 2010, if you are covered by a retirement plan at work, your deduction  to a traditional IRA is phased out if your modified AGI is:

• More than $89,000 but less than $109,000 for a married couple filing a joint return or a qualifying widow(er),
• More than $56,000 but less than $66,000 for a single individual or head of household, or
• Less than $10,000 for a married individual filing a separate return.

Please post a comment if you have any questions?

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