Over at Avvo.com we came across the following question and answer:
Are contributions to traditional IRAs always tax-deductible, regardless of income?
Brian Mikulencak
Tax Lawyer - Austin, TX
Contributor Level 9
Answered . You can always *contribute* to a traditional IRA regardless of income, but whether you are allowed to take a deduction for that contribution depends on income. Furthermore, whether you or your spouse has access to a qualified retirement plan through employment affects the analysis. The advantage of a non-deductible contribution is that the investment may grow tax free. You should probably see a financial adviser to determine whether you want to go down that road.
Additionally, anyone can currently make a traditional IRA contribution and then convert those funds to a Roth IRA, regardless of income, under current law. However, you should consult with a tax adviser before approaching that technique because adverse tax consequences could result (particularly if you have existing traditional IRA assets). Don't rely on a financial adviser for such a conversion -- they often do no understand the tax consequences.
Additionally, anyone can currently make a traditional IRA contribution and then convert those funds to a Roth IRA, regardless of income, under current law. However, you should consult with a tax adviser before approaching that technique because adverse tax consequences could result (particularly if you have existing traditional IRA assets). Don't rely on a financial adviser for such a conversion -- they often do no understand the tax consequences.
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