IRA Contributions - 2009 and 2010Submitted by Grunden Financial Advisory, Inc on February 12th, 2010
The IRA is a great tool to help you secure your financial future. To fully utilize the benefits of an IRA, it is important to make the maximum yearly contributions. There is still time to make a contribution for 2009 if you haven’t already done so and now is also good time to make your 2010 contribution. Please note – Traditional and ROTH IRAs have the same contribution limits. 2009 ROTH IRA contributions have income restrictions (must earn $166,000 or less for married filing jointly) and are not tax deductible. However, there is no income restriction for 2010 ROTH IRA contributions. While this maybe advantageous to some, many investors in the higher tax brackets will benefit more from the tax deduction today associated with Traditional IRA contributions. Note: we are not CPAs or tax professionals; please consult your tax advisor for your personal tax deduction status.
If you were under 50 for the entire year of 2009, you may contribute $5,000. If you turned 50 anytime during 2009, the catch-up provision allows you to contribute an additional $1,000 – so your total contribution is $6,000.
If you will be under 50 during 2010, you may contribute $5,000. If are 50 and over, or will turn 50 in 2010, the catch-up provision allows you to contribute an additional $1,000 – so your total contribution is $6,000.
If you will turn 70 ½ in 2010, you may no longer make contributions.
Remember – you must have earned income equal or greater than your contribution, and 2009 contributions must be postmarked by April 15, 2010 to count as a 2009 contribution.
If you are not sure you contributed to your IRA last year we can check your contribution history.