Roth IRA Contribution Limits
Annual Contribution Limits
Roth individual retirement account (IRA) contribution limits
mirror those for traditional IRAs and are shown in the table
below. Roth IRA are made on an after-tax basis.
| YEAR |
AGE 49 & BELOW |
AGE 50 & ABOVE (With Catch-up) |
| 2002-2004 |
$3,000 |
$3,500 |
| 2005 |
$4,000 |
$4,500 |
| 2006-2007 |
$4,000 |
$5,000 |
| 2008 |
$5,000 |
$6,000 |
Income Limitations on Contributions
However, if your adjusted gross income (AGI) is above a
certain amount, your maximum contribution limit for the year is
gradually reduced. Roth IRA contributions are limited under the
following circumstances:
| Roth IRA Contribution Phase-out |
| Filing status |
Modified AGI |
| |
phase-out begins |
no deduction |
| married filing jointly |
$150,000 |
$160,000 |
| married filing separately and you lived with your
spouse during the year |
$0 |
$10,000 |
| anything other than the above two |
$95,000 |
$110,000 |
Figuring the contribution reduction. If your AGI is
between the ranges provided above, you can only contribute a
reduced amount for the year. If your AGI is above the limits
listed above, you cannot contribute to a Roth IRA. However, you
can still make nondeductible contributions to a traditional IRA
if you want to.
Excess contributions. A 6 percent excise tax applies
to excess contributions made to a Roth IRA. However, any
contribution withdrawn on or before the due date for filing your
tax return (generally April 15) is treated as an amount that is
not contributed. So, you can simply avoid the excise tax by
withdrawing the excess contribution in time. |