Income limit
An income limit is a rule that says once you earn above a certain amount of money per year you are no longer allowed to do a specific financial action, like contributing directly to a Roth IRA.
Where it is explained in full
Workplace plans: the 401(k), the 403(b), and the TSP, from the first paycheck to the last. Everything a person needs to open one, fill it, hold the right things in it, avoid the traps, and carry it with them when they leave. Long on purpose, so that one page is enough.
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Words beside it
- Adjusted gross income (AGI)
Your total income minus certain deductions; many limits, including who can deduct an IRA, are based on it.
- contribution limit
The maximum dollar amount the government allows you to put into a certain account in a given year.
- earned income
Earned income is money you receive from working, like a paycheck from a job or pay from freelance work. You generally need earned income to be allowed to contribute to an IRA at all.
- federal income tax
A portion of the money you earn that the United States government collects each year, with the amount based on how much you made during that year.
- gross income
The total amount of money you earn before any taxes or deductions are taken out. It is the big number at the top before anything gets subtracted.
- Income statement
Revenue, costs, and profit over a period.
- Limit order
An order that executes only at a specified price or better. The price is certain, the fill is not.
- modified adjusted gross income
Modified adjusted gross income is a specific calculation of your yearly earnings that the IRS uses to decide if you qualify for certain accounts or benefits. It starts with your total income and then adds or removes a few specific items according to tax rules.
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