Retirement Tax planning..Help!

[Mardi Gras Audrey]

Hi all..

I had a question about contributions to a Roth IRA. If I am working for an employer with a qualified Retirement plan (401k, etc) and I have 100% of earnings allocated to that plan, do the earnings still count for the purposes of contributing to a Roth?

I will be working part time this year and expect to earn, at max, ~$10k. Because that is lower than the $16.5k that one can put in a 401k, I could conceivably put 100% of my earnings in the 401k. I also have cash on hand that I would like to get into my Roth IRA. If I have $0 in taxable income ($10k earnings- $10k 401k contributions), can I put $5k of my cash into a Roth (This money is currently sitting in a savings account and was already taxed)?

Adding to the fun is that I also have ~$100k in a rollover IRA that I would like to convert a little at a time to the roth. If I had $0 taxable at my job but rolled over $20k (this now becomes taxable), can I contribute the $5k to my Roth? My taxable income would now be $20k but my W-2 from work would still say $0.

I know this is kinda complicated but I am trying to get the best bang for my tax dollar, as it is. Thanks in advance for any help...

[commentator]

Apr 3, 2011 16:29:31 GMT -5 Mardi Gras Audrey said:

Hi all..

I had a question about contributions to a Roth IRA. If I am working for an employer with a qualified Retirement plan (401k, etc) and I have 100% of earnings allocated to that plan, do the earnings still count for the purposes of contributing to a Roth?

No.

I will be working part time this year and expect to earn, at max, ~$10k. Because that is lower than the $16.5k that one can put in a 401k, I could conceivably put 100% of my earnings in the 401k. I also have cash on hand that I would like to get into my Roth IRA. If I have $0 in taxable income ($10k earnings- $10k 401k contributions), can I put $5k of my cash into a Roth (This money is currently sitting in a savings account and was already taxed)?

No.

Adding to the fun is that I also have ~$100k in a rollover IRA that I would like to convert a little at a time to the roth. If I had $0 taxable at my job but rolled over $20k (this now becomes taxable), can I contribute the $5k to my Roth? My taxable income would now be $20k but my W-2 from work would still say $0.

No.

I know this is kinda complicated but I am trying to get the best bang for my tax dollar, as it is. Thanks in advance for any help...

It's not at all complicated. The rules are clear.

[teen persuasion]

What about a spousal IRA?

If the OP's spouse has taxable income, she should be able to contribute to a ROTH just like a SAHM can.

[commentator]

Apr 4, 2011 10:17:53 GMT -5 teen persuasion said:

What about a spousal IRA?

If the OP's spouse has taxable income, she should be able to contribute to a ROTH just like a SAHM can.

A spousal IRA is a provision of the tax code that deals with the situation of the spouse having no taxable income.

The OP didn't ask about her spouse. She didn't even say whether she has a spouse. She asked about herself.