Not Everyone Can Contribute To A Roth

Posted By Paul

There have been several posts about Roth IRA's ("The Roth as a College Savings Vehicle", "How sure are you that your child will go to college?", "The Roth IRA: A tax shelter for your golden years.") and there is all kinds of info out there about the annual contribution limits, but many articles don't even mention that unless you meet certain criteria you're not eligible to contribute to a Roth IRA.

I went on a hunt to find the specific criteria for contributing to a Roth IRA. I wanted to get the info from the source so I went directly the IRS web page.

The problem with that is that the IRS has very little information at your fingertips via their web page. My experience has been that the IRS web page just lets you access their forms and info booklets via pdf's, which I guess is better than nothing, and probably much simpler for the IRS to maintain.

So for the actual info on the criteria for contributing to a Roth IRA, you can look at the publication located here:

http://www.irs.gov/pub/irs-pdf/p590.pdf
(hopefully this link will remain valid for a while)

If you go to page 58 you can see a pretty decent table that summarizes the conditions for contributing to a Roth IRA.

Here is some basic info I can summarize:

-If you're single and your modified adjusted gross income is less than $95,000 you can contribute the full amount to a Roth.

-If you're filing jointly and your modified adjusted gross income less than $150,000 you can contribute the full amount to a Roth.

-If you're married and filing separately and your modified adjusted gross income is $0 then you can contribute the full amount to a Roth.

If you're anywhere near the borderline where you might not be eligible to contribute the full amount to a Roth IRA, I suggest you read the latest publication (and you might want to ask an accountant to confirm). Tax laws are confusing and often defy simplification.