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Topic: eligibility for Roth IRAs for US citizens abroad  (Read 868 times)

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eligibility for Roth IRAs for US citizens abroad
« on: June 19, 2010, 01:44:37 PM »
I've read in many places now (eg here: http://talk.uk-yankee.com/index.php?topic=61456.0 [nofollow] ) that you cannot contribute to a Roth IRA if you exclude your entire salary from your taxable income using the foreign earned income exclusion. But this seems wrong. In the IRS's Publication 590,

http://www.irs.gov/pub/irs-pdf/p590.pdf [nofollow]

it says that your eligibility for Roth IRA contributions is determined by your *Modified* Adjusted Gross Income MAGI, where the MAGI is your AGI *plus* several things, including the foreign earned income exclusion. So, it sounds like if you exclude your salary for the AGI, you can put it back in for the MAGI, and thus become eligible for the Roth IRA once again.

Am I wrong? Is it a loophole? I haven't read anything that agrees with my analysis, so maybe there is something I haven't thought of?


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Re: eligibility for Roth IRAs for US citizens abroad
« Reply #1 on: July 26, 2010, 10:32:16 AM »
Sorry, the IRS says explicitly that you can't contribute money to an IRA (whether Roth or traditional) that is excluded as foreign earned income. See http://www.irs.gov/publications/p590/ch01.html#en_US_publink1000230355 (under heading "What is Not Compensation").


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