The Roth IRA contribution limits 2010 are important for retirement savers.
The 2010 IRA contribution limits are unchanged. Since 2008, the limit to contribute to this IRA has been $5,000. However, if the owner is 50 or older by the end of the year, you can contribute an extra $1,000, for a $6,000 total contribution limit.These limits apply to both regular and Roth IRAs. Although the individual may be eligible to contribute to both plans, the combined contribution to both accounts cannot exceed the above stated limit ($5,000 or $6,000).
There is no maximum income restriction for contributing to a regular IRA, there are limits to deducting regular IRA contributions and there are maximum income limits for Roth IRA contributions. During 2010, married individuals who file jointly can contribute $5,000 or if older than 50 years can contribute up to $6,000to a Roth IRA only if the modified adjusted gross income (MAGI) is below $167,000.
The contribution in a Roth IRA are based on the MAGI of the individual according to Maximum Roth IRA Contribution 2010 if the MAGI is between $167,000 and $177,000, then they can contribute some amount less than their full limit. If their income exceeds $177,000, they are not eligible to contribute to a Roth IRA for 2010. For single individuals,Maximum Contribution is allowed if the MAGI is between $105,000 to $120,000
During 2010, the opportunity to convert a regular IRA to a Roth IRA is available to all taxpayers regardless of income. Previously, a conversion was only available to those who had a modified adjusted gross income of $100,000 or less.
If the individual is under 50 years of age at the end of 2010 then, the maximum Roth IRA contribution 2010 that can be made is $5,000 or the amount of your taxable compensation for 2010. The rule s same while contributing to the traditional IRA but while having two retirement accounts the combined limit is $5,000. Now the modified adjusted gross income will determine the maximum deductible contribution to a Roth IRA.
Ifthe individual is 50 years old before 2010 then the maximum contribution that can be made to a Roth IRA is $6,000 or the amount of your taxable compensation for 2010. This can be divided while maintaining two retirement accounts but, the maximum limit for the two is $6,000. This amount can be reduced depending on your modified adjusted gross income.
The rules of the contribution change each year hence it is advised to visit online for calculations or consult a tax planner or an retirement expert as they will be able to provide a clear picture of the contribution limits and plan in a better way.