2011 IRA Contribution Limits

If you have not already made your Roth or Traditional IRA contribution for 2011 and/or 2012, you should do so. The longer the money has to grow, the better off you should be. With the increases in taxes due to the sunset of current dividend and capital gains rates, as well as new taxes imposed by the Health Care Legislation, we feel the sheltering of earnings is a smart and beneficial move, even if you do not receive a tax deduction for your Traditional IRA contributions.

Remember the deadline for a 2011 contribution is April 17, 2012.

You should discuss your options with your financial adviser or tax consultant before making a Traditional IRA contribution.

To qualify to make a Roth or a Traditional IRA contribution, you must have earned income. The following lists the income limits and contribution limits for a Roth and a Traditional IRA:

Married Filing Jointly

• If your combined adjusted gross income (AGI) is more than $183,000, you cannot contribute to a Roth. Your contributions should be made to a Traditional IRA.
• If your AGI is between $173,000 and $183,000, the amount you may contribute to a Roth phases out the closer your income is to $183,000. If your income is in this range, discuss with your tax adviser the amount you may contribute to a Roth IRA. The remainder could be contributed to a Traditional IRA.
• If your AGI is below $173,000, you are allowed to make the full contribution to a Roth.

Single

• If your AGI is more than $125,000, you cannot contribute to a Roth. You should contribute to a Traditional IRA.
• If your AGI is between $110,000 and $125,000, the amount you may contribute to a Roth phases out the closer your income is to $125,000. You should consult with your tax adviser for the amount you are allowed to contribute to a Roth. The remainder could be contributed to a Traditional IRA.
• If your AGI is below $110,000, you can make a full contribution to a Roth.

2012 IRA Contribution Limits

The Economic Growth and Tax Relief Reconciliation Act of 2001 increased IRA contribution limits. Listed below are limits for both Roth and Traditional IRAs. This tax bill also created catch-up contributions for individuals, who are age 50 and older.

Before making any retirement plan contributions, you should always consult with your tax consultant. For more information regarding this topic, contact Henssler Financial at 770-429-9166 or experts@henssler.com.

Disclosures

This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.