Max contribution to Roth

Apr 10, 2008 3 Replies
H

Over-50 person has $5000 gross income from part-time teaching. Because part-timers are eligible for state 401k plan, he contributed $1500 to 401k.



What is the max he can contribute to Roth - $5000 or $3500?


-HW "Skip" Weldon Columbia, SC


-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.



Vote
Twitter Facebook LinkedIn
J

Sounds like $3500 to me.

formatting link
bottom, explains it: "To make things easy, the IRS says you can generally treat any item as compensation income if it's included in the box of Form W-2 labeled "Wages, tips, other compensation." There's one exception: any portion of "Wages, tips, other compensation" that's also reflected in the box labeled "Nonqualified plans" doesn't count as "compensation income" for this purpose." Joe

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Vote
Twitter Facebook LinkedIn
W

I read it the same way. I have a different slant on this question. My wife is currently contributing most of her salary to a state employee retirement plan and 457 plan (her annual salary is less than $15,500). Her "take home" pay is approximately $80/month, before taxes. She also contributed $5,000 to a Roth IRA. I believe this is OK as long as my taxable income would cover the difference (i.e., a spousal IRA). Do you agree with my interpretation?

Steve

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Vote
Twitter Facebook LinkedIn
J

Well, if wife can contribute $5000 based on hubby's earnings, as spouse, it would be pretty bad if her earning say $1000, caused then to have her $5000 disallowed, right? I think she can still deposit the $5000, but stranger things exist within the tax code.

Joe

formatting link

-------------------------------------- Misc.invest.financial-plan is a moderated newsgroup where Moderators strive to keep the conversations on-topic for financial planning. Other posting guidelines include a request for brevity and another for trimming posts to which we respond. For all of the other tips and suggestions, see "FROM THE MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the Newsgroup.

Vote
Twitter Facebook LinkedIn

Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required