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Author: srozz Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Opening Roth IRA for '99 and 2000 revised Date: 2/28/2000 11:50 AM
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Question (Slightly confused)

I have my own business with no employees. I must pay taxes on the income I make. Since I am opening a Roth IRA for '99 and 2000 this year of 2000 with the money I have made, do I apply taxes due on the $4,000 for year 2000 taxes due? Or am I suppose to separate the income taxes and pay for taxes on $2000 due for 1999 and $2000 due for year 2000?
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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30290 of 121061
Subject: Re: Opening Roth IRA for '99 and 2000 revised Date: 2/28/2000 2:12 PM
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<< I have my own business with no employees. I must pay taxes on the income I make. Since I am opening a Roth IRA for '99 and 2000 this year of 2000 with the money I have made, do I apply taxes due on the $4,000 for year 2000 taxes due? Or am I suppose to separate the income taxes and pay for taxes on $2000 due for 1999 and $2000 due for year 2000? >>

The Roth contributions don't affect your tax liability. You pay tax for 1999 on your 1999 income, and tax for 2000 on your 2000 income.

If you're wondering about the AGI limitation for Roth contributions, your 1999 contribution is governed by your 1999 income, even though you're making the contribution in 2000.

Phil Marti
Tax Preparer

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Author: srozz Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30451 of 121061
Subject: Re: Opening Roth IRA for '99 and 2000 revised Date: 2/29/2000 11:30 AM
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So you are saying I cannot contribute to a 1999 Roth IRA with the money I make in year 2000. I did not make enough in 1999 for a 1999 Roth IRA.

<< I have my own business with no employees. I must pay taxes on the income I make. Since I am opening a Roth IRA for '99 and 2000 this year of 2000 with the money I have made, do I apply taxes due on the $4,000 for year 2000 taxes due? Or am I suppose to separate the income taxes and pay for taxes on $2000 due for 1999 and $2000 due for year 2000? >>

The Roth contributions don't affect your tax liability. You pay tax for 1999 on your 1999 income, and tax for 2000 on your 2000 income.

If you're wondering about the AGI limitation for Roth contributions, your 1999 contribution is governed by your 1999 income, even though you're making the contribution in 2000.

Phil Marti
Tax Preparer

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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 30460 of 121061
Subject: Re: Opening Roth IRA for '99 and 2000 revised Date: 2/29/2000 1:02 PM
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<< So you are saying I cannot contribute to a 1999 Roth IRA with the money I make in year 2000. I did not make enough in 1999 for a 1999 Roth IRA. >>

Your 1999 Roth IRA contribution is limited to $2,000 or your 1999 earned income, whichever is less. Earned income includes wages and your net income from self-employment (bottom line of Schedule C). If your spouse had earned income, you also base your contribution on that.

Phil Marti

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