The Income Limits for Investing in a Roth IRA

by Maggie McCormick

The advantage of a Roth IRA is that you won't have to pay taxes on the money when you make the withdrawals. To qualify for this type of investment, you must meet the Internal Revenue Service's income limits. These are based on your modified adjusted gross income (MAGI). To determine your MAGI, take your adjusted gross income, and add back things like student loan interest, foreign earned income exclusions, tuition and fees, IRA, and other items.

Contribution Limits

The maximum amount that you can contribute to your Roth IRA is the amount of money that you earned, or the maximum amount specified by the IRS, whichever amount is smaller. As of August 2011, the maximum amount allowed is $5,000, but if you only earned $3,000, that is the maximum amount you can contribute.

Single Income Limits

Single filers can contribute the maximum amount as long as income is less than $107,000. If your income is over $122,000, you are not eligible to make contributions. However, if your income falls in between those limits, you can contribute, but not the maximum amount.

Married Filing Jointly Income Limits

The limit for the maximum contribution for married couples filing jointly is $169,000. Couples earning more than $179,000 combined cannot make any contributions to a Roth IRA, even if one spouse's salary is below the single limits. Contributions phase out between those amounts.

Married Filing Separately Income Limits

If you are married filing separately, and you did not live with your spouse for any portion of the year, you can follow the limits for a single filer. If you did live with your spouse, you cannot make contributions to a Roth IRA if your income was more than $10,000. The only case that you can make the maximum contribution is if you did not earn any money. Between those amounts, you can contribute a reduced amount.

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