Roth IRA Contribute And Income Limit

Congress has limited who can contribute to a Roth IRA with income. The taxpayer can not contribute the maximum amount that appears at the top of the page if your Modified Adjusted Gross Income (MAGI) is below a certain level (the bottom of the range indicated below). Otherwise, the gradual elimination of contributions is fixed in proportion to the MAGI ranges shown below. Once MAGI hits the top of the range, no contribution is allowed, however, a minimum of $ 200 may be provided as long as MAGI is below the top of the range (for example, only 40 years old with $ 119,999 Magi can still contribute $ 200 for a Roth IRA vs. $ 30). The excess Roth IRA contributions can be recharacterized contributions to a traditional IRA, provided that the total contribution does not exceed a year. Phase Roth IRA MAGI ranges for 2009 are:

• Single filers: Up to $105,000 (to qualify for a full contribution); $105,000-$120,000 (to be eligible for a partial contribution)
• Joint filers: Up to $166,000 (to qualify for a full contribution); $166,000-$176,000 (to be eligible for a partial contribution)
• Married filing separately (if the couple lived together for any part of the year): $0 (to qualify for a full contribution); $0–$10,000 (to be eligible for a partial contribution).

The lower number represents the point where the taxpayer is no longer allowed to contribute the maximum contribution. The top number is the point where the taxpayer is no longer allowed to contribute at all. Note that persons who are married and living together but filing separately, only allowed to pay a relatively small sum.

However, once established a Roth IRA, the balance of the tax bill remains protected even if the taxpayer's income rises above the threshold. (The limits are annual qualification to contribute, not for eligibility to maintain account.)

To be eligible you must meet the minimum income requirement. To make a contribution, you must have taxable compensation (non-taxable investment income). If you only make $ 2,000 in taxable compensation, the maximum IRA contribution is $ 2,000.