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COPYRIGHT 2005 The Dallas Morning News
Byline: Pamela Yip
Mar. 28--Taxpayers who've wanted to open a Roth IRA but couldn't because they make too much money can take heart.
Starting next year, employers will be able to add a new Roth 401(k) to their menu of retirement plans.
Think of it as a cross between the Roth IRA and a traditional 401(k).
Although the Roth 401(k) and Roth IRA are similar, there are some unsettled questions as to what kind of an animal the Roth 401(k) really is.
"It doesn't have all the attributes of a Roth IRA," said an official with the Internal Revenue Service, which is still working on guidelines.
The only time the Roth 401(k) explicitly picks up the rules from the Roth IRA is when it comes to taking money out of the account.
"Everything else, they put in their own provisions," said the IRS official.
For example, the maximum amount you may contribute each year to a Roth IRA phases out over an adjusted gross income range of $95,000 to $110,000...
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