The questions have started coming in regarding the 2011 income limits for Roth IRA contributions. Planning ahead for taxes is always a good idea. However, sometimes, you can get out a little bit too far.
The IRS publishes various numbers, tax brackets, and the like for the next tax year during the fall of the previous year, depending upon what the number is, and how it is to be calculated. Maximum salary limits for Roth IRA contributions in 2010, for example, were known well in advance because the number was set in statute to be the same as the high income limitations for 2009 Roth IRA contributions.
However, starting in 2011, the income limitations for Roth IRA contributions are indexed for inflation. In other words, the IRS must wait until it has the proper inflation index calculation according to its rules and regulations. Then, it must apply that inflation amount to the Roth IRA contribution limits for income and compute new Roth IRA income phase-out limits and the maximum salary allowed to make Roth contributions at all.
These numbers will not be available until later in the year. When we get the new 2011 Roth IRA limits, we will pass them on to you.
Don’t forget, the law removing the salary cap for converting a traditional IRA to a Roth IRA has been made permanent, so you can covert your IRA in 2011 regardless of how high your MAGI is.
New Roth IRA Income Maximum Salary Limits for 2011
With all of that being said, we can actually make some educated assumptions.
Inflation has been low to non-existent for 2011. That means that Roth IRA income limits will likely not be going up for the 2011 tax year, or that any increase will be very small.
For your advanced tax planning strategies, you can continue using the same Roth IRA numbers from 2010 taxes for your 2011 taxes. There may be some small adjustments necessary when the final IRS numbers come out, but you can safely assume that any calculations based on the 2010 tax-year will be fairly close.
Note: The same information applies to traditional IRA limits for 2011 as well.
Related posts:
- 2012 IRA Contribution Limits
- 2011 Section 179 Deduction Limits for Small Businesses Taxes
- Should I Convert My IRA to a Roth IRA In 2010?
Tags: 2011 taxes, Deductions, income limits, income tax, IRA, ira contribution limits, IRS, roth ira, tax planning
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