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For the 2012 tax year there are some changes that have been made regarding Roth IRA rules. Below is a summary of those changes.

2012 Income Rules

The 2012 Roth IRA Income Limits have increased $3,000 for single tax filers and $4,000 for married filing joint filers over the 2011 levels.

In 2012 single filers can fully contribute to a Roth IRA if their modified adjusted gross income (MAGI) falls below $110,000.

For those filing “married filing joint” tax returns full contributions can be made to a Roth IRA if the modified adjusted gross income falls below a combined $173,000.

The contribution limit is phased out after $125,000 for single filers and $183,000 for married filing joint filers. If your income is above these limits you will not be allowed to contribute to a Roth IRA in 2012.

2012 Contribution Limits

The 2012 Roth IRA Contribution Limits remain unchanged from the 2011 limits.

All qualifying individuals may contribute $5,000 to a Roth IRA in 2011. Individuals age 50 or older may also contribute a “catch-up” contribution of $1,000.

2012 Age Rules

There are no changes to the age rules with Roth IRAs for 2012. Anyone with earned income that falls under the income rules may contribute to a Roth IRA regardless of age.

One of the benefits of using a Roth IRA over a Traditional IRA is you will never be forced to take distributions from the account regardless of age. You may begin withdrawing your earnings at age 59 and 1/2 without tax or penalty. Contributions may be withdrawn at any age without tax or penalty.

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