2010 IRA Contribution and Deduction Limits
The rules regarding contributions to and disbursements from individual retirement accounts change from year to year based on what Congress does; here's what you need to know for 2010.
If you are under 50 at the end of 2010, you can contribute either $5,000 or your total taxable income for 2010, whichever is less. This limit applies to both traditional and Roth IRAs; you may split the money between them, but the total contribution must be no more than the numbers above. If you are fifty years old or older, the limit is raised to the lesser of $6,000 or your total taxable compensation for 2010, with the same restriction as above.
The income limits for claiming the deduction for contributions to a traditional IRA were raised for 2010, as follows. Note that all numbers refer to the modified adjusted gross income.
If your filing status is single or head of household, you can take the full deduction for contributions to a traditional IRA provided that you made (an adjusted) $56,000 or less; you're entitled to a partial deduction provided your adjusted gross income was less than $66,000. If you are married filing jointly or a qualifying widow(er), those numbers increase to $89,000 and $109,000. However, if you are married filing separately, you're entitled to only a partial deduction and only if your AGI was less than $10,000, unless you did not live with your spouse at any time during the year, in which case the rules for single filers apply.
The above numbers apply if you are covered by a retirement plan at work. If not, and you are single, head of household, a qualifying widow(er), married filing jointly, or married filing separately with a spouse who isn't covered by a plan at work, then you can take the full deduction regardless of your AGI. If your spouse is covered by a plan at work, then your limit is $167k for the full deduction, $177k for a partial deduction if filing jointly, $10k for a partial deduction if filing separately.
For a Roth IRA (which doesn't come with a tax deduction), your AGI may affect how much you can contribute. If you are single, head of household, or married filing separately and you did not live with your spouse at any time during the year, you can contribute up to the limits discussed above provided your modified AGI is less than $105k, and a reduced amount as long as it is under $120k. If you're married filing separately and lived with your spouse at any time during the year, you can contribute a partial amount if you made less than $10k. If you are married filing jointly or a qualifying widow(er), you can contribute the full amount if you make under $167k and a partial amount if you make less than $177k.
Another change for 2010 is the elimination of the filing status requirements for converting a traditional IRA to a Roth IRA, and the provision for extra catch-up contributions for certain employer bankruptcies no longer applies. Additionally, the provision allowing tax-free distributions from IRAs for charity is expiring and is no longer available.
The IRA distribution rules for 2010 state that if you made contributions to an IRA in 2009, you could withdraw them tax free at any time up until your tax return was due (either the original due date or the extended due date, if you filed for an extension); however, you may not take a deduction for the contribution and must withdraw any interest earned on that amount (in case of a loss, the amount of interest may be negative).
You must begin receiving distributions from your IRA by April first of the year after you reach age 70 1/2. However, there is an exception in 2010: if you reached this age last year, you do not have to begin taking disbursements at the normal time, but must take the first one by December 31, 2010.
You may take more than the required minimum, if desired, but this does not reduce the amount that you must take in future years. (The exception is that you can count money withdrawn in the year you turn 70 1/2 against the next year, when you would have your first minimum disbursement). The minimum required distribution varied based on the account balance and can be found by referring to the table provided by the IRS. Failure to withdraw the correct amount or more subjects you to an excise tax.
The Three Best Money Related iPad Apps
The iPad, like all of Apple’s products before it, has taken the world by storm. It is the latest and greatest in the "smart" device revolution and every techie is clamoring to get one. Of course, just like all of Apple’s products before it, the iPad is expensive and will put a dent in your wallet. Luckily, there are already a ton of great apps for the iPad specifically designed to help you keep track of your finances.
Many iPad apps cost money to download and install, but there are plenty of free apps out there. Since spending money to keep track of your money seems a little foolish, check out these apps: useful, effective, and completely free. Whether you need to keep track of your online business or just note down your monthly spending, here are the top three best iPad apps to keep your finances organized.
If you’re one of the many iPad users who takes part in the internet marketplace - and, these days, who isn’t? - the free app Square will help you keep track of your transactions. You’ll be able to accept payments through Square for your business or charity. You can, of course, also use Square to accept money from friends or other people in your personal life. Square will help you out with calculating sales tax on your transactions and even automatically produces email and SMS reciepts for both cash and credit card payments. Square is particularly popular among iPad users who appreciate app interfaces that rely mostly on images, providing a visual representation of your financial transactions.
E*Trade Mobile Pro
E*Trade is well known for helping every day people get involved in stock market investing. Wall Street is an ominous, complex system for beginning investors and companies like E*Trade make their money helping every day people actually make a profit when playing the stock market game. E*Trade has recently released an iPad app to help investors everywhere keep track of their investments. The app is customizable so you can keep track of your individual investments, but the app also gives you up to date investment news.
EZTip Calculator Tip Agent
Even the most money aware folks can have trouble dividing a dinner bill into multiple parts and adding in a tip, too. The same goes for splitting up rent and utilities in a shared house or when calculating how much each sibling should pay towards that present for mom. Whatever it is you’re dividing up, the EZTip Calculator is one of those apps that might seem superfluous until you find yourself in the exact moment in which it was made to shine.
So there you have 3 great and completely free iPad apps to help you get the most from your money. Join in on the "smart" device revolution and make your money use smart as well.