Hi,
I have a very basic question, but I've been unable to get a clear cut answer from my online brokerage source. My scenario is that I have a company sponsored 401k and I opened a Roth IRA about 2 years ago. I got married last year and found out that by filing jointly our combined income put me above the limit to contribute non-taxable funds to my Roth account. My question is now, can I still contribute the maximum yearly allowable to the account but just not deduct the contributions on my tax returns?
My second question is basically the same, but applies to a Traditional IRA. I just opened(last night) one up online and see that again, my joint filing income level puts me beyond the limit of being able to contribute tax-free. Can I still contribute the max yearly allowable?
If the answer is yes, I would have a traditional, roth and a brokerage account. I would imagine that it would make the most sense to use the traditional and roth accounts for more active trading than the brokerage account? I'm not a very active trader if that helps.
I hope my question is clear and there is a simple answer. I'm really interested in putting as much away as possible, but feel somewhat dettered by my lack of understanding at the moment. Thanks in advance for any clarity!
Full Version: Roth and Traditional Income Limits/Taxable Contributions
Ok, i figured it out on my own. I can't contribute anything to my Roth but I can contribute the max of $4000 to my Traditional IRA. I just can't deduct it from taxes.
Which leads me to a new question! Do I have to fill out the Form 8606, Nondeductible IRAs on every return assuming i'm contributing every year, stay married, etc or just fill it out at the time of distribution? Thanks again.
Which leads me to a new question! Do I have to fill out the Form 8606, Nondeductible IRAs on every return assuming i'm contributing every year, stay married, etc or just fill it out at the time of distribution? Thanks again.
QUOTE (Mr.P @ Dec 28 2005, 03:18 PM) 
Hi,
I have a very basic question, but I've been unable to get a clear cut answer from my online brokerage source. My scenario is that I have a company sponsored 401k and I opened a Roth IRA about 2 years ago. I got married last year and found out that by filing jointly our combined income put me above the limit to contribute non-taxable funds to my Roth account. My question is now, can I still contribute the maximum yearly allowable to the account but just not deduct the contributions on my tax returns?
My second question is basically the same, but applies to a Traditional IRA. I just opened(last night) one up online and see that again, my joint filing income level puts me beyond the limit of being able to contribute tax-free. Can I still contribute the max yearly allowable?
If the answer is yes, I would have a traditional, roth and a brokerage account. I would imagine that it would make the most sense to use the traditional and roth accounts for more active trading than the brokerage account? I'm not a very active trader if that helps.
I hope my question is clear and there is a simple answer. I'm really interested in putting as much away as possible, but feel somewhat dettered by my lack of understanding at the moment. Thanks in advance for any clarity!
I have a very basic question, but I've been unable to get a clear cut answer from my online brokerage source. My scenario is that I have a company sponsored 401k and I opened a Roth IRA about 2 years ago. I got married last year and found out that by filing jointly our combined income put me above the limit to contribute non-taxable funds to my Roth account. My question is now, can I still contribute the maximum yearly allowable to the account but just not deduct the contributions on my tax returns?
My second question is basically the same, but applies to a Traditional IRA. I just opened(last night) one up online and see that again, my joint filing income level puts me beyond the limit of being able to contribute tax-free. Can I still contribute the max yearly allowable?
If the answer is yes, I would have a traditional, roth and a brokerage account. I would imagine that it would make the most sense to use the traditional and roth accounts for more active trading than the brokerage account? I'm not a very active trader if that helps.
I hope my question is clear and there is a simple answer. I'm really interested in putting as much away as possible, but feel somewhat dettered by my lack of understanding at the moment. Thanks in advance for any clarity!
I remember reading an article on this topic.
As I remember it you must file each year you make a contribution.
Worse, you must have the 8606s to attach to your 1040 during retirement. The author made the point the IRS computer network is faulty at best and it is the taxpayer who must prove everything.
As I remember it you must file each year you make a contribution.
Worse, you must have the 8606s to attach to your 1040 during retirement. The author made the point the IRS computer network is faulty at best and it is the taxpayer who must prove everything.
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