Note: for the purposes of IRA MAGI qualification, a person filing as Married Filing Separately, who did not live with his or her spouse during the tax year, is considered Single and will use the information on that page to determine eligibility. For a Traditional IRA (Filing Status Married Filing Jointly or Qualifying Widow(er)): If you are not covered by a retirement plan at your job and your spouse is not covered by a retirement plan, there is no MAGI limitation on your deductible contributions. If you are covered by a retirement plan at work, and your MAGI is $90,000 or less, there is also no limitation on your deductible contributions to a traditional IRA. If you are covered by a retirement plan at your job and your MAGI is more than $90,000 but less than $110,000, you are entitled to a partial deduction, reduced by 25% for every dollar […]
2011 tax year
2011 MAGI Limits – Single or Head of Household
Note: for the purposes of IRA MAGI qualification, a person filing as Married Filing Separately, who did not live with his or her spouse during the tax year, is considered Single and will use the information on this page to determine eligibility. For a Traditional IRA (Filing Status Single or Head of Household): If you are not covered by a retirement plan at your job, there is no MAGI limitation on your deductible contributions. If you are covered by a retirement plan at work, if your MAGI is $56,000 or less, there is also no limitation on your deductible contributions to a traditional IRA. If you are covered by a retirement plan at your job and your MAGI is more than $56,000 but less than $66,000, you are entitled to a partial deduction, reduced by 50% for every dollar over the lower limit (or 60% if over age 50), and […]
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Your 2% Opportunity in 2011
By now you’ve heard the news from the 2010 Tax Act – one of the provisions is that during calendar year 2011, the Social Security withholding tax is reduced from 6.2% to 4.2%. This means that you have an additional 2% of your income, up to the $106,800 limit, available to you to do with as you wish. This is your opportunity to make a splash! I think it would be a very good idea to bump up your 401(k) deferral by 2% if you aren’t already maxed out. If you have maxed out your 401(k), you could use the extra money to contribute to your Roth IRA, or put some money into your taxable investment account. No matter what, since this money was originally intended to be for retirement (if it had been withheld for Social Security, it would have gone to *someone’s* retirement), you should put it toward […]
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Tax Act 2010 Provisions
As you are likely aware, two major bills enacting tax cuts for individuals will expire at the end of 2010: the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA); and the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA). The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (Tax Act 2010) extends quite a few provisions from EGTRRA and JGTRRA for an additional two years, most through 2012. It also extends a number of provisions enacted as part of EGTRRA that were modified in the American Recovery and Reinvestment Act of 2009 (ARRA). fyi – you can find the technical explanation at jct.gov – in the document JCX-55-10. Below is a summary of some of the more important provisions that will be extended: Reduction in Employee Payroll Tax The 2010 Tax Act provides for a temporary reduction, for 2011 only, of the employee-paid Social […]
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Charitable Contributions From Your IRA in 2010 and 2011
With the passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (Tax Act 2010 or 2010 Tax Act), Congress retroactively reinstated the ability to make direct qualified charitable distributions (QCDs) from your IRA, in amounts up to $100,000 by IRA owners who are at least age 70½ years of age. This provision expired at the end of 2009, but is once again available, retroactive to January 1, 2010, through December 31, 2011. The provision allows the individual, age 70½ and thus subject to Required Minimum Distributions (RMDs), to make contributions directly from an IRA to a Qualified Charity, in an amount of up to $100,000 per year. Since the 2010 Tax Act was passed so late in the year, there is a special provision for 2010 only, which allows the IRA owner to make such a QCD for the 2010 tax year as late as […]
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2011 Retirement Plan Limits Published
The IRS has published the numbers for the annual contribution and income limits for retirement plans for 2011. You can find the highlights at the page Annual Limits for Retirement Plans – 2011. Essentially, very little changed from 2010 – IRA contribution limits are the same, as are 401(k), 403(b) and 457 plan contributions. The catch up provisions are the same for each type of plan as well. A few of the phase-out limits on MAGI were increased, but by negligible amounts. On the bright side, the Social Security taxation limit did not increase over 2010. Whee! Photo by Wikipedia
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Tax Benefits for College
When faced with the high cost of college, you want to find and take advantage of every opportunity that you can to cut down on your out-of-pocket expenses, before you give in and take out loans. So after you’ve applied for all of the grants, scholarships, and other non-loan financial aid that you can, it’s time to consider what sorts of tax benefits may help out with your situation. Credits There are two different kinds of tax credits currently available in tax year 2010 and 2011: American Opportunity Credit – This credit is available for students (and parents of students) that are in their first four years in a degree program at college. The credit is a maximum of $2,500, and is calculated as: 100% of the first $2,000, and 25% of the next $2,000 of Qualified Higher Education Expenses (QHEE) paid for that student. QHEE is limited to tuition, […]
Sterling Raskie, MSFS, CFP®, ChFC®
The latest in our Owner’s Manual series, A 401(k) Owner’s Manual, was published in January 2020 and is available on 
A Medicare Owner’s Manual, is updated with 2020 facts and figures. This manual is available on 
Social Security for the Suddenly Single can be found on Amazon at 
Sterling’s first book, Lose Weight Save Money, can be 
An IRA Owner’s Manual, 2nd Edition is available for purchase on Amazon. Click the link to choose the 
Jim’s book – A Social Security Owner’s Manual, is now available on Amazon. Click this link for the 
And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.