With the April 15 tax filing deadline looming, it is decision time for one of your biggest tax decisions. April 15th is the deadline for contributing to an Individual Retirement Account for calendar year 2008. With the stock market pounded into submission, now is an excellent time to load up on stocks. You’ll need to decide if you will contribute to a deductible IRA, a non-deductible IRA or a Roth IRA.
- Single/Head of Household tax filers. If you file as single or head of household taxpayer and neither participated in nor qualified to participate in an employer sponsored retirement plan during the 2008 calendar year, you are fully eligible. If you were covered by a retirement plan in 2008, the deductibility is phased out based on your adjusted gross income of between $53,000 and $63,000.
- Married filing jointly. For couples filing jointly where one spouse was covered by a plan in 2008, the phase-out of deductibility is between $85,000 and $105,000 for the spouse covered by the plan. For the spouse not covered by the plan, the phase out is between $159,000 and $169,000.
- Married filing separately. Phase out begins with the first dollar of AGI and you are not eligible for a contribution if your AGI is $10,000 or more.
- Single/Head of Household tax filers. You are eligible for a full contribution if your modified adjusted gross income is under $101,000. Your eligibility to contribute is phased out ratably between $101,000 and $116,000.
- Married filing jointly. Full contributions are allowed if your modified adjusted gross income is under $159,000. Contribution limits phase out between $159,000 and $169,000.
- Married filing separately. Same as for tax-deductible IRA.