|
Yes, but depending on your
salary your IRA contribution may not be tax deductible.
For 2000, if you participate in an employer-sponsored retirement plan such as a 401(k),
you can deduct the maximum $2,000 annual IRA contribution only if you are:
ý single and earn less than $32,000, or
ý married filing jointly, and together earn less than $52,000. You may be eligible for a partial deduction if your total income is
between:
ý $32,000 - $42,000 for single filers, and
ý $52,000 - $62,000 for married filing jointly.
If you are single and earn more than $42,000 or married filing jointly and earn more than
$62,000, you can still contribute to an IRA – you just can't deduct your
contribution. On the other hand, money you contribute to an IRA still enjoys the benefit
of tax-deferred growth until you withdraw it at retirement.
For your 1999 tax return, each of the above limits is $1,000 less.
Another possible option is a Roth IRA. Contributions to a Roth IRA are not tax-deductible,
but you don't have to pay taxes on any gain your investment earns – even when you
withdraw money at retirement, as long as you fulfill the requirements. If your taxable
income is less than $95,000 (single) or $150,000 (married-filing-jointly) you can
contribute a maximum of $2,000 per year to a Roth IRA, even if you also participate in a
401(k) plan. If you earn more than the $95,000/$150,000 ceiling, your maximum allowable
contribution will be less than $2,000. If you earn more than $120,000 (single) or $160,000
(married filing jointly) or if your tax filing status is "married filing
separately" and your income is more than $10,000, you are not eligible to contribute
to a Roth IRA. |
|
