The tax deadline, April 15th is nearly here and if you’ve not caught my Last Minute Tax Tips if You’re Still Working on Your Tax Return, it’s a good time to do so.
Here, I focus on the Roth IRA, and its cousins, the Roth 401(k) and the Traditional IRA. As you work on your return, consider whether you’d like to make a deposit to your IRA for 2012. Even though 2012 is over, you have until April 15th to deposit to your IRA.
For 2012 the phaseout range for deducting an IRA contribution when you are covered by a retirement plan at work are as follows:
- For single filers: $58,000 to $68,000
- For head of household filers: $58,000 to $68,000
- For married couples filing jointly: $92,000 to $112,000
- For married couples filing separately: $0 to $10,000
The Roth IRA income phase-out ranges are as follows:
- For single filers: $110,000 to $125,000
- For head of household filers: $110,000 to $125,000
- For married couples filing jointly: $173,000 to $183,000
- For married couples filing separately: $0 to $10,000
If you are beyond the range to deposit to a Roth, you can still deposit money to a traditional IRA but with no deduction. You may have the opportunity to convert it to Roth with no tax due if you have no pre-tax traditional IRA money or with prorated tax due based on the ratio of money that’s pre tax vs post tax.
You may deposit $5000 or if you were 50 or older in 2012, $6000 as long as you had earned income above this amount.
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