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2012 ROTH IRA

2012 Roth IRA Conversions

The IRS made significant changes to conversion rules starting in 2010.

In the past high income earners with incomes over $100,000 were not allowed to convert to a Roth IRA. Their incomes also kept them from contributing to a Roth IRA.

Starting in 2010 the income cap for conversions has been removed. Now everyone, including high income earners, can convert to a Roth IRA whenever they want as long as they pay the appropriate taxes.

2012 Roth IRA Contribution Limits

Starting in 2012 the maximum contribution you can invest into a Roth IRA is indexed to inflation. Despite inflation ranging in the 3% to 4% range for 2011, the IRS has left the maximum contribution limit unchanged for the 2012 tax year.

For regular contributions the limit is $5,000 in 2012. For catch-up contributions for individuals over age 50 the contribution limit is an additional $1,000, bringing the total to $6,000 per year.

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