| What are the Roth IRA limits imposed by the | | | | maximum contribution limits phases out to zero. |
| IRS? | | | | Here's a breakdown on the limits... |
| You know the rules so you can avoid any | | | | Married Filing Jointly |
| unnecessary penalties or taxes. | | | | If you're married and filing a joint tax return, then |
| For instance, the IRS places restrictions on each | | | | you can earn as much as $166,000 and still be |
| of the following: | | | | eligible to make the maximum contribution. |
| - Type of income | | | | However, once you earn $176,000, you are no |
| - Personal income | | | | longer eligible to make a contribution. |
| - Annual contribution amounts | | | | Married Filing Separately |
| In order to better understand your limitations, let's | | | | If you're married and filing a separate tax return |
| examine each of these factors individually. | | | | (and you lived with your spouse for any part of |
| Earned Income Limits | | | | the tax year), then you can only earn $0 and still |
| One of the Roth IRA limits imposed by the IRS | | | | be eligible to make the maximum contribution. As |
| concerns the type of income you can legally | | | | you earn money, your maximum contribution |
| contribute. | | | | gradually phases out to zero. |
| Your annual contributions can only be funded by | | | | Once you earn $10,000 or more, you're no longer |
| certain types of income. | | | | eligible to make a contribution. |
| According to IRS Publication 590, qualified earned | | | | Single, Head of Household, or Married Filing |
| income includes... | | | | Separately (didn't live with spouse) |
| "Wages, salaries, tips, professional fees, bonuses, | | | | If you're single, head of household, or married |
| and other amounts received for providing personal | | | | filing a separate tax return (and didn't live with |
| services. It also includes commissions, | | | | your spouse for any part of the tax year), then |
| self-employment income, nontaxable combat pay, | | | | you can earn as much as $105,000 and still be |
| and taxable alimony and separate maintenance | | | | eligible to make the maximum contribution. After |
| payments." | | | | that, your contribution limit gradually phases out to |
| What types of income are NOT eligible for | | | | zero. |
| contributions? | | | | However, once you earn $120,000, you are no |
| In short, anything that doesn't meet the definition | | | | longer eligible to make a contribution. |
| outlined above. Income such as retirement | | | | Annual Contribution Limits |
| pension income, rental property income, stock | | | | The maximum size of your annual contribution is |
| dividends, bank interest, and other passive cash | | | | another Roth IRA limit imposed by the IRS, and |
| flows are NOT eligible. | | | | the maximum contribution limit is dependent on |
| Personal Income Limits | | | | your age. |
| Roth IRA limits are also placed on your personal | | | | Assuming your income doesn't place in the |
| income. Once you earn a certain amount of | | | | contribution phase out range, your maximum |
| income during the course of the tax year, your | | | | annual contribution limit is... |