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Author: BigArb One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75340  
Subject: 401K into Roth IRA Date: 2/5/2004 11:07 AM
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Hi everyone
First and foremost I want to thank everyone who has ever taken any time to answer my questions. You have inspired me to help whenever I can(OK its not that much).
My questions
I used to have a 401k with my old employer, when I left I converted it into a Roth IRA. I was wondering if my rollover counts as a contribution. I also was wondering if someone open a Roth is there initial deposit limited to 3000 dollar contribution for that tax year.
Thanx in advance for all your help.
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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38936 of 75340
Subject: Re: 401K into Roth IRA Date: 2/5/2004 11:16 AM
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BigArb: "I used to have a 401k with my old employer, when I left I converted it into a Roth IRA. I was wondering if my rollover counts as a contribution."

Technically, you first rolled the 401k to a traditional IRA (non-taxable event if handled correctly) and you then converted the traditional IRA to a Roth IRA (which is a taxable event). We hope that you paid the taxes due on conversion with funds outside the account. Rollovers are not contributions.

"I also was wondering if someone open a Roth is there initial deposit limited to 3000 dollar contribution for that tax year."

Generally yes, assuming that (1) you are not over 50 and (2) your (M)AGI is not in the phase-out range for contributing to a Roth IRA or over the limit for contributing to a Roth IRA.

Regards, JAFO



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Author: BigArb One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38937 of 75340
Subject: Re: 401K into Roth IRA Date: 2/5/2004 12:10 PM
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JAFO
You are right, I did roll it inro a IRA first, and the taxes will be paid this year.
If a person is over 50 are they limited to 3500 per person or is it higher? Im asking for my father who unfortunately doesnt have much of anything else except a 401K.
Thanks for your help and you did answer my question.
Arby

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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38940 of 75340
Subject: Re: 401K into Roth IRA Date: 2/5/2004 1:00 PM
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BigArb: "If a person is over 50 are they limited to 3500 per person or is it higher? Im asking for my father who unfortunately doesnt have much of anything else except a 401K."

$3500 for 2004, IIRC, and I believe that it is sheduled to rise in time, but do not have the schedule handy.

"Thanks for your help and you did answer my question."

Your welcome.

Regards, JAFO



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Author: Mark0Young Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38942 of 75340
Subject: Re: 401K into Roth IRA Date: 2/5/2004 1:13 PM
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Actually, between now (January 1, 2004) and the tax deadline, excluding extensions (April 15, 2004, for most filers), one could potentially open a Roth IRA account and make an initial deposit of $7,000:

Between January 1, 2003 and April 15, 2004, if one qualifies for Tax Year 2003, one can make one or more contributions totalling no more than $3,000 for one's 2003 Roth IRA contribution. If one is 50 or older, more specifically was at least 50 years old on December 31, 2003, the limit is $3,500.

Between January 1, 2004 and April 15, 2005, if one qualifies for Tax Year 2004, one can make one or more contributions totalling no more than $3,000 for one's 2004 Roth IRA contribution. If one will be 50 or older, more specifically was at least 50 years old on December 31, 2004, the limit is $3,500.

So, between January 1, 2004 and April 15, 2004, it is possible for one to contribute a total of $6,000, $6,500, or $7,000, depending on age, to a Roth IRA, as long as one meets the other requirements (taxable compensation, Modified AGI limits, tax filing status).

One should be careful to show how much is for each year's contributions on the paperwork and on the check(s), especially when making contributions for the prior tax year's contributions.

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Author: 2old4bs Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 38949 of 75340
Subject: Re: 401K into Roth IRA Date: 2/5/2004 5:42 PM
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If a person is over 50 are they limited to 3500 per person or is it higher?

Here is a schedule of tax years and the corresponding contributions allowed for each year:

2003 $3500
2004 $3500
2005 $4500
2006 $5000
2007 $5000
2008 $6000
2009 $6000

Hope this helps. Naturally you should check these numbers. There are many retirement website and probably somewhere here on TheFool that have these annual contribution lists.

2old



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