Confused about whether you can contribute to a Roth IRA? The IRS suggests checking these simple rules:
To contribute to a Roth IRA, you must have compensation (e.g., wages, salary, tips, professional fees, bonuses). Your modified adjusted gross income must be less than:
$160,000Married Filing Jointly$10,000Married Filing Separately (and you lived with your spouse at any time during the year)$110,000Single, 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 2002 contribution limit is the lesser of your taxable compensation or $3,000 ($3,500 for those age 50 or over).
The maximum contribution limit phases out if your modified adjusted gross income is within these limits:
$150,000 - $160,000Married Filing Jointly$0 - $10,000Married Filing Separately (and you lived with your spouse at any time during the year)$95,000 -$110,000Single, 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." Visit the IRS Web site at IRS.gov, or call 1-800-TAX-FORM (1-800-829-3676) to request a free copy of the publication.
This daily Tax Tip has been provided by the IRS
Note: These tips are provided to help trigger ideas on ways to minimize your tax burden, not as a substitute for professional advice. There is no "one-size-fits-all" answer - each taxpayer's situation is different. You should contact your tax preparer to determine together how this may affect your unique situation.