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"Fiscal Cliff" Roth IRA Update

New law has no impact on 2012/2013 Roth IRAs income/contribution limits; in-plan conversions impacted

The legislative wrangling over the so-called fiscal cliff has everyone concerned–and confused–about its impact on their financial health. Here's the good news, at least for retirement savings: the recent law has no impact on 2012 and 2013 IRA income and contribution limits. Changes to "in-plan" conversion rules are discussed here.

Remember that you have until the tax filing deadline (April 15, 2013) to make a contribution for 2012.

For reference, here's our Roth and Traditional IRAs comparison.

The 2013 Roth income guidelines are as follows:

If your filing status is... And your modified AGI is... Then you can contribute...
married filing jointly or qualifying widow(er)

< $178,000

up to $5,500

> $178,000 but < $188,000

a reduced amount

> $188,000

zero

married filing separately and you lived with your spouse at any time during the year

< $10,000

a reduced amount

> $10,000

zero

single, head of household, or married filing separately and you did not live with your spouse at any time during the year

< $112,000

up to $5,500

> $112,000 but < $127,000

a reduced amount

> $127,000

zero

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