@Ethan Tax Question wrote:
I sold 100,000 of stock and make 80,000 a year so I am over the maximum Wage to submit to Roth IRA. Two questions, I wanted to place money in a roth so can I first place in a traditional IRA and then do a Roth Conversion. It may not make sense because my tax rate will be higher then it normally is because of the sale. Are there other ways to reduce my tax rate? I do own a home and have a loan if that helps.
The maximum IRA contributions is $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year which ever is less.
(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).
See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355
See this IRS link for Traditional IRA deduction limits when covered by a retirement plan at work.
https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
