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Main rules for annual contributions to a Roth IRA.
Most people who work for a living (or have a spouse who works for a living) can contribute to a Roth IRA. There's still an income limit on regular contributions, though, even though the income limit on conversions has been repealed. Here's an overview of the rules for regular contributions.
Before we turn to the restrictions, here are some items that don't affect your contributions.
For 2010 and 2011. the basic limit for regular contributions to a Roth IRA is $5,000 for people under 50 years of age, and $6,000 for those who are 50 or older. (Numbers like this can be found in our Reference Room.) This limit may be reduced for any of the following reasons:
For each year you contribute to a Roth IRA, you (or your spouse, if you file jointly) must have compensation or alimony income. If you don't have compensation or alimony income you can't contribute, even if you have other types of income. And if your compensation or alimony income is less than the maximum contribution, the amount you can contribute is reduced.
For some people the most important limit on contributions to a Roth IRA is based on modified adjusted gross income ("modified AGI," defined below). If this number is too large, your contribution limit may be reduced — possibly all the way to zero.
|Married filing jointly||$169,000|
|Married filing separately, living apart for entire year||$107,000|
|Married filing separately, other||$0|
As your modified AGI rises above those amounts, your contribution amount is gradually reduced or "phased out," and eventually eliminated.
The amount you can contribute to a Roth IRA is reduced for certain other contributions:
Your Roth IRA contribution is not reduced or otherwise affected by any contribution you make to a 401k plan or 403b plan — even if you contribute to a Roth account in one of these plans. (Technically these amounts are contributed by your employer, not by you, even though the contribution reduces your paycheck.)
Q: What if I contribute to a SEP IRA or SIMPLE IRA?
A: Typically these contributions are "elective deferrals," which don't reduce your eligibility to contribute to a Roth IRA. Just like the dollars that go into a 401k plan, they're considered to be contributed by your employer. But you're also permitted to make a regular "IRA-type" contribution to a SEP IRA. If you make this type of contribution to a SEP IRA, it reduces the amount you can contribute to a Roth IRA.
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