Arthur Kamlet wrote:
[...]
- quote -


- quote -

There is the exception of the IRA contribution allowed for the spouse
with no earned income of their own, based on the other spouse's earned
income, but it would still probably be non-deductible in this case due
to AGI.

- quote -

No, not really, in my opinion. Because of the special rules coming up
about conversions from non-deductible Traditional IRA's to Roth
regardless of AGI, you could tuck away maybe an extra $5 or $10K into a
Roth, but that's about it.

-Mark Bole

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"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
news:gdb4id$86l$1[at]registered.motzarella.org...
- quote -

ah, when I said $400k AGI, I was ambiguous . . .

thanks for the refresher, all.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Gil Faver wrote:
- quote -

No earned income = no IRA deposit of any kind.
I'm sorry, when you said $400K AGI, I assumed. My bad.
If he is under 59-1/2 he has a penalty for early withdrawal, yes.

Joe

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

In article <dk8Kk.76805$Mh5.59897[at]bgtnsc04-news.ops.worldnet.att.net> ,
Gil Faver <rowdy'sboss[at]xxyz.com> wrote:
- quote -


Ah, additional and quite critical information. Best to include it
in original post.


In order to contribute to either a Roth or a traditional IRA,
you must have at least that much Taxable Compensation.

Taxable Compensation includes wages, self employment, certain
farming and fishing income, bonuses, tips, severance pay and, for
IRAs, it also includes alimony income.

It does not include interet, dividends, capital gains, gambling
winnings, rental income, social secuity, IRA distributions or pensions.


So if there is no Taxable Compensation there is no allowed IRA
contribution.


- quote -


N/A
--


ArtKamlet at a o l dot c o m Columbus OH K2PZH

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

"joetaxpayer" <joetaxpayer[at]nospam.com> wrote in message
news:gdb00e$9rp$1[at]registered.motzarella.org...
- quote -

a couple of points. first, he has no earned income, so he cannot take the
deduction. Second, your point about only having one traditional IRA
regardless of the number of accounts is a good one. And due to his AGI, he
is precluded from a Roth IRA.

So, I guess he can put money into a traditional IRA, nondeductibly.

Will he be penalized for early withdrawal, even to the proportion of his
nondeductible contributions?

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

Gil Faver wrote:
- quote -

Regardless of income, if he has no retirement account at work, he can
take the deduction. I'll assume he does have a 401(k), so it's not
deductible.

Yes, he can make the non-deductible contribution to the IRA.

As someone one corrected me, your guy has only one IRA, regardless of
the number of accounts they are in. Non-deducted deposits are tracked
via 8606 as you note. Any withdrawal (or Roth conversion, for that
matter) is pro-rated between pre and post tax deposits.

The obvious advantage is the tax deferral on the growth. A potential
advantage comes in 2010, maybe, when we might be able to convert,
regardless of income, to a Roth IRA. One trick (legal, of course) is to
roll all pretax funds into the 401(k) account, so only post tax money is
available for Roth conversion, and no tax due. Did I cover your
question? Miss anything?

Joe

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >

a taxpayer has a high income, let's say $400k AGI.

Can he make non-deductible contributions to a traditional IRA? If so, he
must deal with form 8606, as noted in other recent threads. If he makes a
withdrawal before the magic age (I forget the age, but this guy is in his
50s), are their penalties applicable, and must the withdrawal be pro-rated
between the deductible contributions (made earlier, when he was not as well
off) and the non-deductible contributions?

I guess these details are soliciting the answer to this broader question:
are there meaningful tax advantages to be had by a high AGI guy via IRAs?

Not familiar with Roths, I don't even know the questions to ask in a similar
vein for this guy.

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<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2007) - All rights reserved. > << ------------------------------------------------------- >