Tax Tip: Roth IRAs
To contribute to a Roth IRA, you must have compensation (i.e. wages, salary, tips, professional fees, bonuses). Your modified adjusted gross income must be less than:
- $160,000 - Married filing jointly.
- $10,000 - Married filing separately (and you lived with your spouse at any time during the year).
- $110,000 - Single, Head of Household, or Married filing separately (and you did not live with your spouse during the year).
There is no age limitation for Roth IRA contributions. Unlike traditional IRAs, you can be any age and still qualify to contribute to a Roth IRA.
In general, if your only IRA is a Roth IRA, the maximum yearly contribution limit is the lesser of $2,000 or your taxable compensation.
The maximum contribution limit phases out if your modified adjusted gross income is within these limits:
- $150,000 - $160,000 - Married filing jointly
- $0- $10,000 - Married filing separately (and you lived with your spouse at any time during the year)
- $95,000 -$110,000 - Single, Head of Household, or Married filing separately (and you did not live with your spouse)
Contributions to Spousal Roth IRA
You can make contributions to a Roth IRA for your spouse provided you meet the income requirements.
When to Make Contributions?
Contributions to a Roth IRA can be made at any time during the year or by the due date of your return for that year (not including extensions).
For complete information and definitions of terms, get Publication 590 , "Individual Retirement Arrangements." You can call 1-800-829-3676 to request a free copy of the publication.
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This daily Tax Tip has been provided by the IRS