Determining Your MAGI

There are income limits for contributing to an IRA (traditional and Roth), and below are links by filing status to illustrate the income limits in the situation where you are or are not covered by an employer-provided retirement plan, given your filing status.  This, along with your filing status and your Modified Adjusted Gross Income (MAGI) is an important factor in setting the limits for TIRAs, as there is the issue of deductibility at stake.Determining Your MAGI In order to fully understand the limitations, you also need to understand what makes up your Modified AGI (MAGI).  The MAGI is calculated as follows: 1.    Start with your Adjusted Gross Income (line 22, Form 1040A, or line 38, Form 1040). 2.    Add back in your IRA deduction amount (line 17 on Form 1040A or line 32 on Form 1040) 3.    Add back in your student loan interest (line 18 on Form 1040A or line 33 on Form 1040) 4. Add back in any tuition and fees deductions from line 34 on Form 1040 (or line 19 on Form 1040A) 5.    Add any domestic production activities from line 35 on Form 1040 (there is no line for this on 1040A) 6.    Add back any foreign earned income exclusions from line 18 of Form 2555EZ or line 45 of Form 2555. 7.    Add back any foreign housing deduction from line 50 of Form 2555 8.    Add back any excluded qualified savings bond interest shown on line 3, Schedule 1, Form 1040A, or line 3, Schedule B, Form 1040 (from line 14, Form 8815) 9.    Add back in any excluded employer-provided adoption benefits shown on line 30, Form 8839. The total of these nine items listed above make up your Modified Adjusted Gross Income, or MAGI. For the IRA MAGI limitations where your income tax filing status is Single or Head of Household, click here. Note: if a taxpayer files Married Filing Separately and did not live with his or her spouse during the tax year, for the purposes of IRA eligibility that taxpayer is considered Single and would use this table. (click here for 2009 limits) If your income tax filing status is Married Filing Jointly or Qualifying Widow(er), click here for the IRA MAGI limitations. (click here for 2009 limits) For a tax filing status of Married Filing Separately, and you have lived with your spouse at any time during the tax year, click here for IRA MAGI limitations. (click here for 2009 limits) Return to the IRA Owner’s Manual IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

About the author

Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

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