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Education Savings Account
The contribution phase-out range for ESA joint filers is $190,000 to $220,000 and single filers $95,000 to $110,000.
Traditional IRA Deduction
This chart summarizes whether you can take a full deduction, a partial deduction, or no deduction from your Traditional IRA contribution.
| Effect of Modified AGI1 on Deduction if Covered by Retirement Plan at Work
In 2003, if you are covered by a retirement plan at work, use this table to
determine if your modified AGI affects the deduction you can take for
contributions made to your Traditional IRA. For subsequent tax years,
see additional information below. |
| IF your filing
status is ... |
AND your modified
adjusted gross income
(modified AGI) is ... |
THEN you can take ... |
| Single, or Head of Household |
Less than $40,000 |
A full deduction |
| At least $40,000 but
less
than $50,000 |
A partial deduction |
| $50,000 or more |
No deduction |
 |
| Married Filing Jointly or Qualifying Widow(er) |
Less than $60,000 |
A full deduction |
| At least $60,000 but less than $70,000 |
A partial deduction |
| $70,000 or more |
No deduction |
|
| Married Filing Separately2 |
Less than $10,000 |
A partial deduction |
| $10,000 or more |
No deduction |
|
1Modified AGI (adjusted gross income).
2If you did not live with your spouse at any time during the year, your filing status is
considered Single for this purpose (therefore, your IRA deduction is determined
under the "Single" column).
The thresholds for all filing statuses, except married filing separately, are
scheduled to increase each year through 2005 for single filers and through 2007
for joint filers. The amounts reflected above are for tax year 2003. |
| |
| Effect of Modified AGI1 on Deduction if NOT Covered by Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the deduction you can take for contributions made to your Traditional IRA. |
| IF your filing status is ... |
AND your modified adjusted gross income (modified AGI) is ... |
THEN you can take ... |
| Single, Head of Household, or Qualifying Widow(er) |
Any amount |
A full deduction |
|
Married Filing Jointly
or Separately with a
spouse who is not
covered by a plan at
work |
Any amount |
A full deduction |
|
Married Filing Jointly
with a spouse who is
covered by a plan at
work |
Less than $150,000 |
A full deduction |
At least $150,000 but
less than $160,000 |
A partial deduction |
| $160,000 or more |
No deduction |
|
| Married Filing Separately with a spouse who is covered by a plan at work2 |
Less than $10,000 |
A partial deduction |
| $10,000 or more |
No deduction |
|
1Modified AGI (adjusted gross income).
2You are entitled to the full deduction if you did not live with your spouse at any
time during the year. |
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Contribution Limits
| Tax Year |
Traditional OR Roth IRA**
|
SIMPLE
|
SAR-SEP
(Pre-tax deferral maximum) |
ESA
|
| 2201 |
$2000 |
$6500 |
$10,500 |
$500 |
| 2002 |
$3000 |
$7000 |
$11,000 |
$2,000 |
| 2003 |
$3000 |
$8000 |
$12,000 |
$2,000 |
| 2004 |
$3000 |
$9000 |
$13,000 |
$2,000 |
| 2005 |
$4000 |
$10,000 |
$14,000 |
$2,000 |
| 2006 |
$4000 |
$10,000 |
$15,000 |
$2,000 |
| 2007 |
$4000 |
Indexed for inflation in $500
increments beginning in 2007 |
$2,000 |
| 2008 & after |
$5000 |
$2,000 |
*The maximum regular contribution amount can be adjusted for inflation in 2009 & 2010.
**This includes Traditional IRA contributions made by an employee into their own SEP IRA account. |
Catchup Contributions
The Tax Relief Reconciliation Act of 2001 allows individuals age 50 or older to make additional contributions called “catchup
contributions.” Catchup contributions can be made into IRAs or 401(k), 403(b), SAR-SEP, SIMPLE or 457 plans.
| Additional Amount That Can Be Contributed |
| Tax Year |
IRA*
|
401(k), SAR-SEP, 403(b), 457 |
SIMPLE |
| 2201 |
$0 |
$0 |
$0 |
| 2002 |
$500 |
$1000 |
$500 |
| 2003 |
$500 |
$2000 |
$1,000 |
| 2004 |
$500 |
$3000 |
$1,500 |
| 2005 |
$500 |
$4,000 |
$2,000 |
| 2006 |
$1000 |
$5,000 |
$2,500 |
| 2007 |
$1000 |
Amounts will be adjusted for inflation |
| * Can be to either a deductible or Roth IRA |
This information may answer some of your questions, but it is not intended as a comprehensive analysis of this complex topic. First Clearing, LLC periodically
provides information to clients. No one should infer that because of this service First Clearing, LLC assumes any fiduciary duties. In addition, such services should not be relied upon as your only source of information. Competent tax and legal advice should always be obtained.
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