Calculate Your Eligibility for a Roth IRA

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).

From just $107.88 $24.99 for Kiplinger Personal Finance

Become a smarter, better informed investor. Subscribe from just ~~$107.88~~ $24.99, plus get up to 4 Special Issues

CLICK FOR FREE ISSUE

https://cdn.mos.cms.futurecdn.net/flexiimages/y99mlvgqmn1763972420.png

Sign up for Kiplinger’s Free Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

TOPICS

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.