No retirement plan, AGI in excess of $160K, Roth contribution eligible

[Guest William Brooks]

Can a husband and wife who file jointly, who have an AGI in excess of $160,000, neither of whom are active participants in a retirement plan, contribute to a Roth IRA? If not a Roth, could they contribute to a traditional but deductible IRA? Thanks

[Appleby]

They cannot contribute to a Roth IRA. As Roth IRA contributions are non-deductible, plan particpation status does not affect the ability to contribute.

This link will help you to determine deductibility for traditional IRAs

http://www.irs.ustreas.gov/forms_pubs/pubs...bs/p5900108.htm

[John G]

If this couple has a business, they should look into pension profit sharing options where they can set aside approximately 25% of the income.

Another option could be tax managed mutual funds with the objective of obtaining 100% long term capital gains. This is not a IRA/Keogh type shelter but is perhaps the next best option.