Question: Now that a regular IRA can be converted to a Roth regardless of income, is eligibility for opening or contributing to a Roth still income dependent?
Answer: Yep. (Sorry to burst your bubble.) Even though higher-income earners can now convert traditional IRAs to Roth accounts, they still can’t contribute to a Roth if they make too much money. In 2010, your ability to put money into a Roth phases out when your adjusted gross income hits:
- $120,000 for single filers
- $177,000 for joint filers
- $10,000 if you’re married filing separately
(Wondering how to calculate your adjusted gross income? Click here.)
The new conversion rules create a contribution loophole, however. Make too much money to contribute to a Roth? For now, you can stow the money in a 401K or traditional IRA and convert it to a Roth later.
Do you have Roth questions? (Or questions about anything financial?) Leave a comment and let me know.