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taxmap/pubs/p590-014.htm#TXMP307b32c7 Chapter 2 Roth IRAs(p58)

Roth IRA

taxmap/pubs/p590-014.htm#TXMP2efdae84 What's New for 2007(p58)

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Modified AGI limits for Roth IRA contributions increased.(p58)

For 2007, your Roth IRA contribution limit is reduced (phased out) in the following situations.

• Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $156,000. You cannot make a Roth IRA contribution if your modified AGI is $166,000 or more.
• Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2007 and your modified AGI is at least $99,000. You cannot make a Roth IRA contribution if your modified AGI is $114,000 or more.
• Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more.

See Can You Contribute to a Roth IRA in this chapter.

taxmap/pubs/p590-014.htm#TXMP029bd8c3
Catch-up contributions in certain employer bankruptcies.(p58)

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 Roth IRA. See Catch-up contributions in certain employer bankruptcies under How Much Can Be Contributed? in this chapter.

taxmap/pubs/p590-014.htm#TXMP2471aaa9 What's New for 2008(p58)

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Roth IRA contribution limit.(p58)

If contributions on your behalf are made only to Roth IRAs, your contribution limit for 2008 will generally be the lesser of:

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

If you were age 50 or older before 2009 and contributions on your behalf were made only to Roth IRAs, your contribution limit for 2008 will generally be the lesser of:

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

However, if your modified AGI is above a certain amount, your contribution limit may be reduced. For more information, see How Much Can Be Contributed? under Can You Contribute to a Roth IRA? in this chapter.

taxmap/pubs/p590-014.htm#TXMP0ba4e453
Modified AGI limit for Roth IRA contributions increased.(p58)

For 2008, your Roth IRA contribution limit is reduced (phased out) in the following situations.

• Your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least $159,000. You cannot make a Roth IRA contribution if your modified AGI is $169,000 or more.
• Your filing status is single, head of household, or married filing separately and you did not live with your spouse at any time in 2008 and your modified AGI is at least $101,000. You cannot make a Roth IRA contribution if your modified AGI is $116,000 or more.
• Your filing status is married filing separately, you lived with your spouse at any time during the year, and your modified AGI is more than -0-. You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more.

See Can You Contribute to a Roth IRA? in this chapter.

taxmap/pubs/p590-014.htm#TXMP6c83030a
Rollovers from other retirement plans.(p58)

For 2008, you can rollover amounts from an eligible retirement plan into a Roth IRA. For more information, see Rollovers from other retirement plans in this chapter.

taxmap/pubs/p590-014.htm#TXMP18e74088 Reminder(p58)

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Deemed IRAs.(p58)

For plan years beginning after 2002, a qualified employer plan (retirement plan) can maintain a separate account or annuity under the plan (a deemed IRA) to receive voluntary employee contributions. If the separate account or annuity otherwise meets the requirements of an IRA, it will be subject only to IRA rules. An employee's account can be treated as a traditional IRA or a Roth IRA.

For this purpose, a "qualified employer plan" includes:

• A qualified pension, profit-sharing, or stock bonus plan (section 401(a) plan),
• A qualified employee annuity plan (section 403(a) plan),
• A tax-sheltered annuity plan (section 403(b) plan), and
• A deferred compensation plan (section 457 plan) maintained by a state, a political subdivision of a state, or an agency or instrumentality of a state or political subdivision of a state.

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Introduction

Regardless of your age, you may be able to establish and make nondeductible contributions to an individual retirement plan called a Roth IRA.

taxmap/pubs/p590-014.htm#TXMP044dda75 Contributions not reported.(p58)

You do not report Roth IRA contributions on your return.

taxmap/pubs/p590-014.htm#TXMP7800a2da What Is a Roth IRA?(p59)

Roth IRA

A Roth IRA is an individual retirement plan that, except as explained in this chapter, is subject to the rules that apply to a traditional IRA (defined below). It can be either an account or an annuity. Individual retirement accounts and annuities are described in chapter 1 under How Can a Traditional IRA Be Set Up.

To be a Roth IRA, the account or annuity must be designated as a Roth IRA when it is set up. A deemed IRA can be a Roth IRA, but neither a SEP IRA nor a SIMPLE IRA can be designated as a Roth IRA.

Unlike a traditional IRA, you cannot deduct contributions to a Roth IRA. But, if you satisfy the requirements, qualified distributions (discussed later) are tax free. Contributions can be made to your Roth IRA after you reach age 701/2 and you can leave amounts in your Roth IRA as long as you live.

taxmap/pubs/p590-014.htm#TXMP6c172817 Traditional IRA.(p59)

A traditional IRA is any IRA that is not a Roth IRA or SIMPLE IRA. Traditional IRAs are discussed in chapter 1.

Previous Page:  Publication 590 - Individual Retirement Arrangements (IRAs) - What Acts Result in Penalties or Additional Taxes? Next Page:  Publication 590 - Individual Retirement Arrangements (IRAs) - When Can a Roth IRA Be Set Up? Use   to find additional occurrences of topic items.