Feature Articles: Taxes
Guidelines for Roth IRA Contributions
Reviewed and used with special permission from the IRS by Suzi McGarvey, Extension Associate, Human Environmental Sciences, University of Missouri Extension
Taxpayers confused about whether they can
contribute to a Roth IRA should consider guidelines
based on the following categories:
- Income Limits
To contribute to a Roth IRA, you must have compensation (e.g., wages, salary, tips, professional fees, bonuses). These limits vary depending on your filing and marital statuses. - Age
There is no age limitation for Roth IRA contributions. - Contribution Limits
In general, if your only IRA is a Roth IRA, the maximum 2008 contribution limit is the lesser of your taxable compensation or $5,000 ($6,000 if 50 or older). The maximum contribution limit phases out depending on your modified adjusted gross income. - Spousal Roth IRA
You can make contributions to a Roth IRA for your spouse provided you meet the income requirements. - Time
Contributions to a Roth IRA can be made at any time during the year or by the due date of your return for that year (not including extensions). - 2008 Phase Out Limits
Roth IRA contribution limits are reduced (phased out) based on the following filing statuses and income (AGI) levels:- Married filing jointly or qualifying widow(er) with modified AGI of $159,000. You cannot make a Roth IRA contribution if your modified AGI is $169,000 or more.
- Single, head of household, or married filing separately (did not live with spouse at any time in 2008) with modified AGI of $101,000. You cannot make a Roth IRA contribution if your modified AGI is $116,000 or more.
- Married filing separately (lived with spouse at any time during the year) with modified AGI of more than -0-. You cannot make a Roth IRA contribution if your modified AGI is $10,000 or more.
Roth IRA contributions are not tax deductible and are
not reported on your tax return. On the other hand, you
do not include in your gross income, and therefore are
not taxed on, any qualified distributions or
distributions that are a return of your regular Roth IRA
contributions or that are rolled over into another Roth
IRA.
For complete information and definitions of terms,
get Publication 590, Individual Retirement Arrangements.
Visit the IRS Web site at
IRS.gov, or
call 1-800-TAX-FORM (1-800-829-3676) to request a free
copy of the publication.
Source: IRS Tax Tip 2008-26
 |
Site Administrator: |
|
|
|
Last update: Tuesday, May 05, 2009
