Tax Free Income – AGI – Roth Contribution Limits

I received an email from and individual traveling to Iraq for work. While not specifically military he will be working with them as a civilian. He will be receiving income in 3 categories. Normal pay from his employer and an additional hostile work environment bonus, both totaling approximately $85k. He will also be receiving some form of tax-exempt income from the work of approximately $40k-60k. He is not aware of any additional special considerations he would get not being in the military but working with them so we are working on the assumption he receives no other bonuses.

My question is his ability to contribute to a ROTH or Traditional IRA. Not knowing the specifics of his types of pay, my guess is that his tax-exempt income would not contribute to his AGI and would keep him below the single contribution limits and any phaseout (traditional IRA phaseout would apply) however it may impact his AGI but be reduced later with a nontaxble combat pay election.

Not knowing more about his type of pay, has anyone seen workers receiving tax-exempt compensation and how it impacts their AGI and therefore their opportunities to contribute to either retirement plan?

I believe he also intends to participate in his 401k and there is a possibility he could max his contribution.

Any idea of how the tax-exempt portion of his income might impact use of these plans would be appreciated.

Thanks,
Erick



Hi,
This is steven.I am new member to this site. Not knowing more about his type of pay, has anyone seen workers receiving tax-exempt compensation and how it impacts their AGI and therefore their opportunities to contribute to either retirement plan? Thank you for giving a chance.

=============================
steven7
So I suggest people earning a more money. For more details please visit us.

[url=http://makemoney.bizoppjunction.com]Make Money[/url]



@ Erick,
I believe it would be best if you could find out the location of your client/whose email you refer to. Then I would suggest you to take into the Taxation policy of that location and suggest the solutions to him/her. As far as my knowledge goes, taxation is a part that is distributed between the Federal and the State / Local Govts. and as such you have to do a proper evaluation only after thorough consultation.

Peter
[url=http://www.womenclothingforall.com/%5Dwomen clothings[/url]



Add new comment

Log in or register to post comments