Married people may file taxes singly, or separately as the Internal Revenue Service refers to it, for various reasons. They may be separated or in the process of divorcing. It may also result in less tax for some couples than filing a joint return. However, income limitations apply to Roth Individual Retirement Account contributions, and those filing separately who reside with their spouse have a much lower eligibility threshold than joint filers.
Roth Contribution Limits
As of the time of publication, the individual contribution limit for both traditional and Roth IRAs is $5,000 for individuals under the age of 50, if earnings equal at least that amount, and $6,000 for those 50 and over.
As of the time of publication, for heads of households, singles and those married but filing separately who did not live with the spouse during the year at any time, the adjusted gross income (AGI) limit for contributing the full amount to a Roth IRA is $107,000. If the AGI is between $107,000 and $122,000, partial contributions are permitted. If the AGI is greater than $122,000, no contribution may be made. However, those who are married and filing separately who resided with their spouse at any time during the tax year can have an AGI of between zero and $10,000 to make a partial Roth IRA contribution. AGIs above $10,000 are ineligible for any Roth IRA contribution if filing in this manner.
Filing as the head of household rather than married filing separately may reduce taxes and allow greater Roth IRA contributions. Under this classification, the head of household is eligible for the standard deduction even if the spouse itemizes deductions. Heads of household cannot live with the spouse, must pay over half of the costs of keeping the residence for the tax year, have a qualifying dependent living with them by Internal Revenue Services regulations must be "considered unmarried" on December 31 of the tax year. If the qualifying dependent is a parent, actual residence with the head of household is not required.
Unlike traditional IRAs, Roth IRAs are paid with post-tax dollars and are not deductible on income tax returns. While the minimum age to withdraw funds from both traditional and Roth IRA accounts is 59 1/2, there is no mandatory age for Roth withdrawals. With traditional IRAs, withdrawals must commence by age 70 1/2. Traditional IRA withdrawals are taxable, while Roth IRAs withdrawals are tax-free.
- Jupiterimages/Brand X Pictures/Getty Images