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Financial Planning / Tax Strategies


Subject:  Modified Adjusted Gross Income Date:  1/31/2007  8:23 PM
Author:  cstillwell55 Number:  91543 of 127753

I made contributions to a Roth IRA for 2006, but now Turbo Tax is saying that my "modified adjusted gross income" is too high. Are capital gains considered in this calculation? Our combined salaries is less than 160,000 but we had a large capital gains that would put us over that limit. I read in an IRS publication under the heading "What Is Not Compensation?" and it listed "Earnings and profits from property, such as rental income, interest income, and dividend income." So I thought that capital gains were not included.

Also as I was entering the Roth contributions, Turbo Tax decreased the amount of my calculated refund. Why would contributing to a Roth make my tax liability go up?

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