As a followup to my earlier posts on IRA contribution limits and the income limits for traditional IRA deductions…
I thought I’d highlight the income limits for making Roth IRA contributions.
As you’re likely aware, not everyone can contribute to a Roth IRA. Rather, depending on your modified adjusted gross income (MAGI), you may only be able to make a partial Roth contribution, or no contribution at all.
As a reminder, the IRA contribution limit for 2012 is/was $5k with an extra $1k ($6k total) for those 50 and older. For tax year 2013, the contribution limit has increased to $5.5k with an extra $1k ($6.5k total) for those 50 and older.
Income limits for 2012 contributions
Recall that you can make 2012 IRA contributions up to April 15, 2013. Here are the relevant income (MAGI) limits:
- Single or head of household: Contributions phase out b/t $110k-$125k.
- Married (joint): Contributions phase out b/t $173k-$183k.
- Married (separate, living apart): Contributions phase out b/t $110k-$125k.
- Married (separate, other): Contributions phase out b/t $0-$10k.
Income limits for 2013 contributions
For 2013 contributions (which can be made through April 15, 2014) the following income (MAGI) limits apply:
- Single or head of household: Contributions phase out b/t $112k-$127k.
- Married (joint): Contributions phase out b/t $178k-$188k.
- Married (separate, living apart): Contributions phase out b/t $112k-$127k.
- Married (separate, other): Contributions phase out b/t $0-$10k.
Funding a Roth IRA when over the limit
Note that, while you can’t contribute directly to a Roth IRA if you’re over the income limit, the income limits for converting to a Roth IRA went away in 2010. Thus, you can contribute (non-deductible) to a traditional IRA and then convert to a Roth IRA.
If this interests you, be aware that the situation is more complex if you have a traditional IRA (including SEP and/or SIMPLE) with tax-deferred contributions. Thus, you’ll need to do your homework before proceeding.
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