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Traditional IRA
If you have earned income and you are under 70½ years old before the close of your current taxable year, you can make a Traditional IRA contribution, up to the lesser of $5,000 for 2010 or 2011 ($6,000 if you are age 50 or over), or 100% of your earned income. Your contributions may be tax deductible. You are eligible to contribute and deduct up to the annual limits each year if: - You are not married and not an active participant in an employer-sponsored retirement plan; or
- You are an active participant in an employer-sponsored plan, and your Modified Adjusted Gross Income (MAGI) is $56,000 in 2010 and 2011 or less if you are a single tax filer, or $89,000 in 2010 ($90,000 in 2011) or less if you file jointly with your spouse.
Roth IRA
Depending on your tax filing status and modified adjusted gross income (MAGI), you may be able to make a Roth IRA contribution, up to the lesser of $5,000 for 2010 or 2011 ($6000 if you are age 50 or over), or 100% of your earned income. You are eligible to contribute up to the annual limits each year: - If you are a single tax filer and your MAGI is $105,000 in 2010 or $107,000 or less in 2011. If your MAGI is between $105,000 and $120,000 in 2010 (between $107,000 and $122,000 in 2011), you may be eligible for a partial contribution. If it is $120,000 or over in 2010 ($122,000 or over in 2009), no contribution can be made.
- If you file jointly with your spouse and your joint MAGI is $167,000 or less in 2010 ($169,000 in 2011). If your MAGI is between $167,000 and $177,000 in 2010 or between $169,000 and $179,000 in 2011, you may be eligible for a partial contribution. If it is over $177,000 in 2010 or $179,000 in 2011, no contribution can be made.
Tax laws are complex and subject to change. Morgan Stanley Smith Barney LLC, its affiliates and Morgan Stanley Smith Barney Financial Advisors do not provide tax or legal advice. This material was not intended or written to be used for the purpose of avoiding tax penalties that may be imposed on the taxpayer. Individuals are urged to consult their personal tax or legal advisors to understand the tax and related consequences of any actions or investments described herein.
GP-10-02664P-N12/10
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