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So, if our joint income is below $150K this year but will exceed that amount next year, then it makes sense to do a ROTH for 2004 becuase I won't even be allowed to do that next year, right?

Maybe. Conventional wisdom is to use a Roth when you expect your retirement income to be higher than your current income, and to use a traditional IRA when your current income (or more correctly your current tax rate) is expected to be higher than in retirement.

If you're flirting with the Roth limits, your tax rate is likely fairly high now. That would make a traditional IRA the usual favorite. But if a Roth makes more sense for you, then yes, this would be an opportunity to make a Roth contribution.

I mean, assuming that the monies I put into a SEP will not lower our joint income to $150, right?

I can never remember if a SEP is an allowable deduction in calculating your MAGI for Roth purposes. Perhaps someone else can confirm. If it is, then if you want a Roth, a reasonable strategy might be to make a SEP contribution to get your MAGI down to where you can make a Roth contribution.
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