The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies

URL:  http://boards.fool.com/ltlt-when-youre-checking-to-see-if-your-agi-12022987.aspx

Subject:  Re: Roth IRA contribution limitations Date:  2/21/2000  6:49 PM
Author:  pmarti Number:  29513 of 121219

<< When you're checking to see if your AGI is below the $95K and/or $110K limit for making a Roth IRA contribution:

What line is that on the 1040 form, line 33? >>

New to taxes, are you? Did you really think it would be that easy?

To determine if you're eligible for a Roth contribution, you must compute your Modified AGI, or MAGI, no doubt after the wise men in Congress who brought it to you. Calculate Roth contribution MAGI as follows:

AGI (line 33 of the 1040) MINUS

any income on line 15b that comes from a conversion of a traditional IRA to a Roth IRA

PLUS

- traditional IRA deduction (line 23)
- student loan interest deduction (line 24)
- Foreign earned income exclusion
- foreign housing exclusion or deduction
- exclusion of qualified bond interest shown on Form 8815, and
- exclusion of employer-paid adoption expenses shown on Form 8839.

MAGI is a concept that turns up frequently, but don't bother memorizing this version. It tends to change from provision to provision. Part of simplification, I guess.

Phil Marti
Tax Preparer
Copyright 1996-2014 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us