Quantcast

How much can you make to contribute to a Roth IRA?

 

Quick Summary

  • If you are single, you must have a modified adjusted gross income under $133,000 to contribute to a Roth IRA for the 2017 tax year, but contributions are reduced starting at $118,000. If you are married filing jointly, your MAGI must be less than $196,000, with reductions beginning at $186,000.
  • For 2018, singles need a modified adjusted gross income under $135,000 and the contributions-reduced level starts at $120,000. For those married filing jointly, the figures are under $199,000 to contribute, with reductions beginning at $189,000.

Note: For the 2017 tax year, you have until the tax filing deadlineApril 17, 2018to make a 2017 contribution. For the 2018 tax year, you have from Jan. 1, 2018, to April 15, 2019, to make a contribution. Click here to see current Roth IRA contribution limits.

The Internal Revenue Service has a set of rules that individuals must meet to be qualified to invest in a Roth IRA. One set of rules pertains to income limits. If your income exceeds a certain amount you will not be allowed to contribute to a Roth IRA.

You Can Only Contribute “Earned Income”

To qualify for a Roth, you must have “earned income” in the year you want to make a contribution.

Earned income is money paid for work you performed (or in the case of a small business, profit distributions from the business). This income includes wages, salaries, tips, bonuses, commissions and self-employment income. Other income that counts includes taxable alimony and military differential pay. Earned income does not include things like interest and dividends from investments, income from rental property, and pension payments.

If your earned income for the year is less than the contribution limit (in 2017 and 2018, $5,500 for those under 50), you can only contribute up to your earned income. In other words, if your earned income is $3,000, you can only contribute up to $3,000.

Income Limits and Tax Filing Status

2018 Roth IRA Income and Contribution Limits
Filing StatusIncome Limit1Contribution Limit
Married filing jointlyLess than $189,000$5,5002
$189,000 to $198,999Begin to phase out
$199,000 or moreIneligible for a direct Roth IRA (learn more about a “Backdoor Roth IRA”)
Married filing separately3$0$5,5002
$1 to $9,999Begin to phase out
Greater than $10,000Ineligible for a Roth IRA
SingleLess than $120,000$5,5002
$120,000 to $134,999Begin to phase out
$135,000 or moreIneligible for a direct Roth IRA (learn more about a “Backdoor Roth IRA”)

1Modified Adjusted Gross Income (MAGI) per IRS.

2Individuals age 50 and over can contribute up to $1,000 extra per year to “catch up” for a total of $6,500.

3Married (filing separately) can use the limits for single people if they have not lived with their spouse in the past year.

The IRS uses different rules for income limits based on your tax filing status for that year.

There are three categories that the IRS uses:

  • Married filing jointly or qualified widow(er)
  • Married filing separately
  • Single or head of household

The following is a summary of the current Roth IRA Income Limits.

Roth IRA Modified Adjusted Gross Income (MAGI)

When the IRS speaks of various income levels it is referring to modified adjusted gross income. To figure your modified adjusted gross income, you will need your adjusted gross income (AGI) from your tax return. You can use Appendix B, Worksheet 2 from IRS Publication 590-A to modify your AGI for Roth IRA purposes.

Roth IRA Income Limits for Single Filers

If you file as single, head of household or married filing separately (if you did not live with your spouse at any time during the year) your MAGI must be less than $120,000 to contribute up to the limit.

If your MAGI falls between $120,000 and $135,000 you cannot contribute the full amount. Your contribution is reduced. Use the IRS worksheet to calculate your new reduced Roth IRA contribution limit.

If your MAGI is $135,000 or more you cannot contribute to a Roth IRA.

Roth IRA Income Limits for Married Filers (Joint)

If you file as married filing jointly or as a qualifying widow(er) your MAGI must be less than $189,000 to contribute up to the limit.

If your MAGI falls between $189,000 and $199,000 you cannot contribute up to the limit. Your contribution is reduced. Use the IRS worksheet to calculate your new reduced Roth IRA contribution limit.

If your MAGI is $199,000 or more, you cannot contribute to a Roth IRA.

Roth IRA Income Limits for Married Filers (Separate)

The IRS severely limits the ability to contribute to a Roth IRA for individuals who are married but file separately and have lived with their spouses at any time during the year. If you do not have earned income you will not be allowed to contribute to a Roth IRA.

If your MAGI is less than $10,000 you cannot contribute up to the limit. Your contribution is reduced. Use the IRS worksheet to calculate your reduced Roth IRA contribution limit.

History of Roth IRA Income Limits

The Internal Revenue Service gradually increases the income limit to account for inflation. For more details, see:.

Compare Popular IRA Providers

Provider
Name
Description