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<< Is the $95,000 limit on income to be eligible for the Roth only deal with regular income or AMT (Alternate Minimum Tax) income as well? >>

The limit is based on "modified adjusted gross income" (MAGI). For Roth purposes, MAGI is AGI (line 33 of the 1040) minus any income attributable to Roth conversion plus

-traditional IRA deduction
-student loan interest deduction
-foreign earned income exclusion
-foreign housing exclusion or deduction
-qualified bond interest excluded on Form 8815
-excluded employer-paid adoption expenses

As you can see, AMT doesn't enter into it.

<< We don't know if my girlfriend should start a Roth IRA now, if over the next few years she will be ineligible to contribute to it because of her stock options >>

The benefit of the Roth IRA is that the earnings will never be taxed. Even if she can't contribute more to it somewhere down the road, what she has contributed can continue to grow without tax liability when she takes qualified distributions in retirement. There's also the possibility that the MAGI limit will be increased, although there's nothing in the works at the moment.

You can read a lot more about Roth IRAs in the Tax Strategies board's FAQ.

Phil Marti
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