Roth IRA: Married Filing Jointly

by Jane Meggitt

Married couples filing jointly can contribute to a Roth individual retirement account (IRA) if meeting income limitations. The eligible amounts are subject to change yearly by the Internal Revenue Service. Unlike traditional IRAs, Roth IRAs are not deductible on federal income tax returns. While traditional IRA contributions are made with pretax dollars, Roth IRA contributions are made with after-tax funds, and in retirement the withdrawals are not taxed.

Maximum Annual Contributions

For 2011, the maximum annual contribution limit for a Roth IRA is $5,000 for an individual under 50, and $6,000 for people 50 and over. A married couple over 50 may contribute as much as $12,000 annually to his and her individual Roth IRA accounts. They can either withdraw contributions tax-free in retirement, or use the accounts as a tax-free estate-planning tool.

Adjusted Gross Income Limits

The adjusted gross income (AGI) limit for a married couple filing jointly to qualify for Roth IRA contributions is $169,000 for making full contributions. It is between $169,000 and $179,000 for partial contributions. If the AGI exceeds $179,000, married couples filing jointly are not permitted to contribute to a Roth IRA.

First Time Home Buying

While the IRS levies a tax on earnings and an additional 10 percent tax for Roth IRA funds withdrawn before the minimum age, an exception from the penalty is made for those buying a first home. To qualify, it must be the first home purchase for both spouses. Up to $10,000 may be withdrawn and used for home financing and related costs ,such as settlement and closing fees. The exemption is also permitted if the Roth IRA owner uses the $10,000 withdrawal to pay for the first home of a child or grandchild. The Roth IRA owner also must have opened the account at least five years earlier to qualify.

Other Exemptions

Other circumstances in which the IRS allows early Roth IRA distributions without the 10 percent penalty include paying for medical expenses exceeding 7.5 percent of your annual AGI, higher education expenses for yourself, spouse or children; and in the event the account owner becomes totally and permanently disabled.

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