How to reduce modified adjusted gross income?

[tiocw]

For 2009, I plan on making $140K, and I'm wondering if I can still contribute to a Roth IRA. The Roth IRA modified AGI limit is 105K (full contribution), or 120K (limited contribution). I will fully invest in a 401k plan, which brings the modified AGI to 124K. I don't believe I would qualify for pre tax traditional IRA (I'm single). I think the 2009 health savings account contribution limit is 3K, and I'd prefer not contributing to a health saving account. Are there any other ways to reduce my modified AGI? I don't have any kids. Thanks

[MiikeB]

Buy a house or prepay taxes for 2010.

[jIM_Ohio]

House lowers taxes, but not MAGI
HSA max is higher than 3k- I contribute close to 6k to ours.

Student loan interest or a tuition and fees adjustment would have some impact. Look on front of 1040 long form under adjustments... any of those lower AGI.

[MonkeyMama]

The HSA max is $3000 if you are single. ($5950 family)

HSAs are nice because there is no income limits for contributing (of course, is a nicer deduction if you are married). Though looks like it won't cut it for you.

There really isn't much else you can do.

Once your income is over the max, your only other option is to go back to contributing to a traditional IRA. (nondeductible contributions). The earnings are tax-deferred, and since you pay taxes on the contribution up front, you are only taxed on earnings when you withdraw in retirement.

I would say this is the way to go for 2009 & 2010. In 2010 you can convert all your regular IRAs to ROTHs. The $100k limit on conversions is lifted in 2010.

This only makes sense if you don't have Traditional IRAs already. Otherwise you can be taxed more heavily on the conversion. Just as a caveat.

A Roth IRA Loophole