The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: Roth IRA eligibility for expat? Date:  1/9/2002  10:16 AM
Author:  WCMinor Number:  56960 of 127549


I share your problem as I live overseas and run into income limits for the Roth IRA. I hope your post generates more responses because I am not sure that my answers are correct; I welcome any corrections.

Question 1: Am I able to open up and contribute to a Roth IRA, given that I only have income earned abroad(UK) in 2001? What if I do not or (or cannot) exclude all of that 2001 foreign earned income on IRS Form 2555? Does that give me the AGI I need to be eligible?

My understanding is that if you exclude all of your foreign earned income and have no US earned income (i.e. no taxed earned income) you are not eligible to contribute to a 403(b) IRA but that you could contribute to a Roth (if you meet the other conditions for a Roth).

Question 2: My income was under the $110K maximum for Roth IRA eligibility in 2001, but may exceed this amount in 2002. What does this mean? Am I better off just going with a Contributory IRA? Or even with index funds not part of a retirement / tax deferred scheme? Does the fact that this is foreign earned income (see above) change the equation (as $76k could be 'excluded')

Eligibility is based on adjusted AGI and you adjust by adding back in your foreign income exclusion so no, you will not qualify for a Roth in 2002.

Question 3: How much would it cost for a financial advisor to sort this out!!?

I got quotes from $800-$3000 for preparing my expatriate tax return and that included getting my IRA eligibility questions answered.

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us