With regards to IRA and Roth IRA eligibility, does MAGI include cash put into 401k?
Answer:
Simple answer no as long as you earned money your are eligible. You are bound to the contribution limits of $4000 if under 50 and $5000 if over 50 though.
You can contribute to a Traditional IRA no matter how much you make. However you may not be eligible for a deduction and you will need to add a form to your return.
ROTH IRAs have limits that kick in around $110k. Which means if you make that much you cannot contribute. Good news though in 2010 that goes bye bye. So a thought might be put money in your Traditional IRA each year until 2010 then convert in 2010 to a ROTH spreading the income tax of that transaction over 2 years.
If you want dead on numbers here is the link to the IRS publication. http://www.irs.gov/pub/irs-pdf/p590.pdf.
No, your adjusted gross income should not include anything you put into a 401(k). Your employer should not even report that income on your W-2.
Steven,
Jason has a good point your 401-K is separate from your IRA account.Therefore your IRA is taxed when you take out the funds at 59 1/2.The Roth Ira is taxed on the front end.Your taxed on your 401-K after you take the money out at any age.
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