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March 3, 2009

My modified adjusted gross income (MAGI) falls within the phase-out range for Roth contribution eligibility? How do I determine………

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My modified adjusted gross income (MAGI) falls within the phase-out range for Roth contribution eligibility? How do I determine………

My modified adjusted gross income (MAGI) falls within the phase-out range for Roth contribution eligibility? How do I determine the amount I am eligible to contribute?

If you use tax-preparation software, it should calculate the amount that you are eligible to contribute. If you want to calculate the amount manually, use the following steps:

  1. Subtract the lower dollar amount in the range from your MAGI.
  2. Divide the result by the difference between the lower amount in the range and the higher amount in the range.
  3. Multiply the result by the maximum contribution amount in effect for you for the year.
  4. Subtract the result from the maximum contribution amount

The result is the amount you are allowed to contribute to a Roth IRA.

See Roth IRA Definition for limits and ranges

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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