Tax planning and compliance for investors
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Kaye A. Thomas
Updated January 5, 2008
The amount you can put into a Roth IRA as a regular contribution is reduced or eliminated if your income goes above certain levels.
Most people can contribute the same amount to a Roth IRA as they would otherwise be allowed to contribute to a traditional IRA. But the amount you can contribute to a Roth IRA is phased out at certain levels of income. That means your contribution may be reduced — possibly all the way to zero — if your income is too high. This page explains the phase-out rules for regular contributions to Roth IRAs.
You're only affected by these rules if your modified adjusted gross income is above certain levels. The level where the reduction occurs is adjusted each year for inflation, beginning in 2007, and depends on your filing status. The following numbers are in effect for 2008, and the inflation-adjusted numbers for later years are available in our Reference Room:
* Some people say you can't contribute if you're married filing separately. Technically that isn't correct, but it might as well be true. You need to have qualifying income to contribute, but your contribution limit is reduced as soon as your modified AGI is more than zero. And if your total income (modified AGI) is less than $10,000, good luck coming up with the dough to contribute to a Roth IRA!
In between the amounts listed above, the annual limit is reduced proportionately. For example, if you're married filing jointly and your modified AGI is $2,500 above the bottom of the phase-out range (one-fourth of the way between the bottom and top), the limit would be reduced by one-fourth.
You've probably noticed that the phase-out range is different for singles than for married couples. For singles, the range is $15,000, but for married couples the range is $10,000. Don't ask me why, that's just the way it is. Our Congress works in strange and mysterious ways.
There are two special rules for figuring the permitted contribution to a Roth IRA:
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