Currently my wife and I are maxing out our 401K's at work and are looking to pad the retirement account a bit more with a Roth. Assuming we qualify, is it true that both my wife and I can set up individual accounts and contribute $2,000 each (total of $4,000) per year? If we were to establish a joint account, would we be able to only contribute a total of $2,000 per year?

If we each open up new accounts before April 16, is it true that($2,000 each) can be counted toward a year 2000 IRA and, if we wanted, that we could pay an additional $2,000 each at the same time to count toward 2001? Finally, what would be the overall benefit to making a late addition to a year 2000 IRA?

Thanks,

Todd

Yes, if you qualify, you may contribute $2,000 to your Roth IRA and $2,000 to your wife's Roth IRA. Since Roth IRAs have to be set up for individuals, you can't establish a joint Roth IRA.

At any time between now and April 16, you can each contribute $4,000. $2000 would be considered the contribution for 2000 and the remainder the contibution for 2001. If you do this, make sure that the IRA custodian knows the tax year for which the contribution is being made so that they can report it properly. If you send in $2,000 this year, they will automatically "code" it as a 2001 contribution unless you tell them otherwise.

The benefit of making a late contribution for 2000 will be found when you retire or take money from your Roth IRA. There will be an additional $2,000 plus interest that won't be there if you don't make the contribution.

Hope this helps. Good luck!