Ron asks: Under current law, what is the maximum contribution allowable to a traditional IRA for 2007? (Even with the indexing, I expect to make too much to be eligible for a Roth contribution.) We are married, filing jointly, have plenty of earned income to support an IRA contribution, and neither my wife nor I will reach 50 years of age in 2007. Thanks for any help.

My reply: Hello Ron! The maximum contribution allowed is the same as it was last year, $4,000.

Anyone who has earned income (and their spouse) can make nondeductible contributions to an IRA.

As for deductible IRA contributions, eligibility phases out for married couples with Modified Adjusted Gross Income (MAGI) between $83,000 and $103,000. There isn’t an income cap for married couples when neither participates in an employer-sponsored retirement plan. If only one spouse participates in an employer-sponsored plan, deductible IRA eligibility for 2007 phases out between MAGI of $156,000 and $166,000 for the uncovered spouse and between $83,000 and $103,000 for the covered spouse.

Best wishes,

Gina