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taxmap/pubs/p590-001.htm#TXMP79cd055e Chapter 1 Traditional IRAs(p7)

Traditional IRA

taxmap/pubs/p590-001.htm#TXMP2f4d6739 What's New for 2007(p7)

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Modified AGI limit for traditional IRA contributions increased.(p7)

For 2007, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified AGI is:

• More than $83,000 but less than $103,000 for a married couple filing a joint return or a qualifying widow(er),
• More than $52,000 but less than $62,000 for a single individual or head of household, or
• Less than $10,000 for a married individual filing a separate return.

For 2007, if you either lived with your spouse or file a joint return, and your spouse is covered by a retirement plan at work but you are not, your deduction is phased out if your modified AGI is more than $156,000 but less than $166,000. If your AGI is $166,000 or more, you cannot take a deduction for contributions to a traditional IRA. See How Much Can You Deduct, in this chapter.

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Rollover by nonspouse beneficiary.(p7)

A direct transfer from a deceased employee's qualified pension, profit-sharing or stock bonus plan, annuity plan, tax-sheltered annuity (section 403(b)) plan, or governmental deferred compensation (section 457) plan to an IRA set up to receive the distribution on your behalf can be treated as an eligible rollover distribution if you are the designated beneficiary of the plan and not the employee's spouse. The IRA is treated as an inherited IRA. For more information about rollovers, see Rollovers under Can You Move Retirement Plan Assets? in this chapter.

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Catch-up contributions in certain employer bankruptcies.(p7)

If you participated in a 401(k) plan and the employer who maintained the plan went into bankruptcy in an earlier year, you may be able to contribute up to $7,000 to your traditional IRA. See Catch-up contributions in certain employer bankruptcies under How Much Can Be Contributed? in this chapter.

taxmap/pubs/p590-001.htm#TXMP6df335db What's New for 2008(p7)

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Traditional IRA contribution and deduction limit.(p7)

The contribution limit to your traditional IRA for 2008 will be increased to the smaller of the following amounts:

• $5,000, or
• Your taxable compensation for the year.

If you were age 50 or older before 2009, the most that can be contributed to your traditional IRA for 2008 will be the smaller of the following amounts:

• $6,000, or
• Your taxable compensation for the year.

For more information, see How Much Can Be Contributed? in this chapter.

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Modified AGI limit for traditional IRA contributions increased.(p7)

For 2008, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified adjusted gross income (AGI) is:

• More than $85,000 but less than $105,000 for a married couple filing a joint return or a qualifying widow(er),
• More than $53,000 but less than $63,000 for a single individual or head of household, or
• Less than $10,000 for a married individual filing a separate return.

For 2008, if you either live with your spouse or file a joint return, and your spouse is covered by a retirement plan at work, but you are not, your deduction is phased out if your AGI is more than $159,000 but less than $169,000. If your AGI is $169,000 or more, you cannot take a deduction for contributions to a traditional IRA. See How Much Can You Deduct? in this chapter.

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Introduction

This chapter discusses the original IRA. In this publication the original IRA (sometimes called an ordinary or regular IRA) is referred to as a "traditional IRA." The following are two advantages of a traditional IRA:

• You may be able to deduct some or all of your contributions to it, depending on your circumstances.
• Generally, amounts in your IRA, including earnings and gains, are not taxed until they are distributed.

taxmap/pubs/p590-001.htm#TXMP1fdc50e6 What Is a Traditional IRA?(p7)

Traditional IRA

A traditional IRA is any IRA that is not a Roth IRA or a SIMPLE IRA.

Previous Page:  Publication 590 - Individual Retirement Arrangements (IRAs) - Individual Retirement Arrangements (IRAs) Next Page:  Publication 590 - Individual Retirement Arrangements (IRAs) - Who Can Set Up a Traditional IRA? Use   to find additional occurrences of topic items.