Trying to figure out what my Roth IRA contribution is for 2018

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Topic Author
Macro
Posts: 16
Joined: Sat Jan 21, 2017 6:35 am

Trying to figure out what my Roth IRA contribution is for 2018

Post by Macro » Wed Jan 09, 2019 8:36 am

Hello,

I've been trying to figure out what my max Roth IRA contribution is for 2018 but cannot seem to find a coherent guide anywhere that tells me what the exact amount I am allowed to contribute is. This would be my first time making a contribution.

I am single, not covered by any employer sponsored pension plan (no 401k). My gross wages listed on my W2 for 2018 is $121,111.04.

I found this on a previous forum post

"If you file as single, head of household or married filing separately (if you did not live with your spouse at any time during the year) your MAGI must be less than $120,000 to contribute up to the limit.

If your MAGI falls between $120,000 and $135,000 you cannot contribute the full amount. Your contribution is reduced. Use the IRS worksheet to calculate your new reduced Roth IRA contribution limit.

If your MAGI is $135,000 or more you cannot contribute to a Roth IRA."


I tried to read through 590A but came up short. It doesn't seem to tell you what the deductions actually are.

Where can I find a worksheet that specifies the exact deduction amounts?

Also, can I make the calculations based off my W2, or do I have to wait until my taxes are completely filed (currently waiting on other 1099 forms from Schwab and savings accounts)?

Thanks!

SRenaeP
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Joined: Tue Jan 19, 2010 9:05 pm

Re: Trying to figure out what my Roth IRA contribution is for 2018

Post by SRenaeP » Wed Jan 09, 2019 8:52 am

From https://www.irs.gov/retirement-plans/pl ... e-for-2018

If the amount you can contribute must be reduced, figure your reduced contribution limit as follows.
1.Start with your modified AGI.
2.Subtract from the amount in (1): ◦$189,000 if filing a joint return or qualifying widow(er),

$-0- if married filing a separate return, and you lived with your spouse at any time during the year, or


$120,000 for all other individuals.


3.Divide the result in (2) by $15,000 ($10,000 if filing a joint return, qualifying widow(er), or married filing a separate return and you lived with your spouse at any time during the year).
4.Multiply the maximum contribution limit (before reduction by this adjustment and before reduction for any contributions to traditional IRAs) by the result in (3).
5.Subtract the result in (4) from the maximum contribution limit before this reduction. The result is your reduced contribution limit.


There is also a worksheet - https://www.irs.gov/publications/p590a# ... 1000231016

Topic Author
Macro
Posts: 16
Joined: Sat Jan 21, 2017 6:35 am

Re: Trying to figure out what my Roth IRA contribution is for 2018

Post by Macro » Fri Jan 11, 2019 11:18 am

Thanks, much appreciated!

FoolMeOnce
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Re: Trying to figure out what my Roth IRA contribution is for 2018

Post by FoolMeOnce » Fri Jan 11, 2019 11:23 am

With gross wages just above the $120k phase-out of full contribution eligibility, your MAGI is probably safely below the phase-out.

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FiveK
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Re: Trying to figure out what my Roth IRA contribution is for 2018

Post by FiveK » Sat Jan 12, 2019 3:35 am

Macro wrote:
Wed Jan 09, 2019 8:36 am
I am single, not covered by any employer sponsored pension plan (no 401k). My gross wages listed on my W2 for 2018 is $121,111.04.
Given that, why are you seeking a Roth IRA instead of a traditional IRA?

livesoft
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Re: Trying to figure out what my Roth IRA contribution is for 2018

Post by livesoft » Sat Jan 12, 2019 4:31 am

One should wait for the 1099s, so that one can include all income in their calculations.

In the meantime, I suppose one has invested the money tax efficiently in a taxable account anyways, right?
Wiki This signature message sponsored by sscritic: Learn to fish.

retiredjg
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Re: Trying to figure out what my Roth IRA contribution is for 2018

Post by retiredjg » Sat Jan 12, 2019 8:34 am

Macro wrote:
Wed Jan 09, 2019 8:36 am
I am single, not covered by any employer sponsored pension plan (no 401k). My gross wages listed on my W2 for 2018 is $121,111.04.
Have you done enough of your tax return to be sure that your "gross wages" will actually be your AGI or your MAGI? If not, you might want to wait until you get that far.

Also, since you have no employer pension plan (which could include something like a 401k plan) you might want to contribute to traditional IRA instead of Roth IRA. Your contribution to tIRA should be fully deductible and save you $1,230 on your taxes.
Also, can I make the calculations based off my W2, or do I have to wait until my taxes are completely filed (currently waiting on other 1099 forms from Schwab and savings accounts)?
If you have 1099 forms coming, that will increase your AGI and MAGI. Using just your "gross income" now is going to give you the wrong number.

airborne
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Re: Trying to figure out what my Roth IRA contribution is for 2018

Post by airborne » Sat Jan 12, 2019 10:40 am

FiveK wrote:
Sat Jan 12, 2019 3:35 am
Macro wrote:
Wed Jan 09, 2019 8:36 am
I am single, not covered by any employer sponsored pension plan (no 401k). My gross wages listed on my W2 for 2018 is $121,111.04.
Given that, why are you seeking a Roth IRA instead of a traditional IRA?
Or just preemptively conduct a backdoor Roth conversion (assuming there are no tax implications with existing traditional IRA accounts)?

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FiveK
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Re: Trying to figure out what my Roth IRA contribution is for 2018

Post by FiveK » Sat Jan 12, 2019 2:11 pm

airborne wrote:
Sat Jan 12, 2019 10:40 am
FiveK wrote:
Sat Jan 12, 2019 3:35 am
Macro wrote:
Wed Jan 09, 2019 8:36 am
I am single, not covered by any employer sponsored pension plan (no 401k). My gross wages listed on my W2 for 2018 is $121,111.04.
Given that, why are you seeking a Roth IRA instead of a traditional IRA?
Or just preemptively conduct a backdoor Roth conversion (assuming there are no tax implications with existing traditional IRA accounts)?
Same question: with the OP's income and non-access to a 401k, why wouldn't a traditional IRA be preferable to Roth now?

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