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Calculate Your Eligibility for a Roth IRA

Here's how to figure out if you qualify to contribute to this tax-advantaged retirement savings vehicle.

My wife and I gross more than $190,000 in income. But after 401(k) contributions and other adjustments, I think we are below the max of $160,000 to contribute to a Roth IRA. How do I know for sure? Is there a line on my 1040 that tells me?

The key figure for Roth IRA eligibility is your "modified adjusted gross income," which is your adjusted gross income -- the last line on the first page of your 1040 -- with a few adjustments. Add back to your income any deduction you had taken for IRA contributions, student loan interest, bond interest used for college costs, employer-provided adoption benefits and a few others (see IRS Publication 590 Individual Retirement Arrangements for a full list and worksheet). Subtract any income that came from converting a traditional IRA to a Roth.

And the AGI itself doesn't include money that had already been deducted from your paychecks, such as pretax money you contributed to a 401(k) or flexible-spending account. In your case, it seems to make the difference. Married couples filing jointly can contribute up to $5,000 each to a Roth IRA in 2008 (or $6,000 if 50 or older) as long as their modified adjusted gross income is less than $159,000. You'll be able to make a partial contribution if your income is less than $169,000 (Publication 590 includes a worksheet to help with these calculations, too).

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