Feature Articles: Taxes
Guidelines for Roth IRA Contributions
Reviewed and used with special permission from the IRS by Suzi McGarvey, Extension Associate, HES Extension, 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 2005 contribution limit is the lesser of your taxable compensation or $4,000 ($4,500 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).
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 2006-25
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Last update: Tuesday, March 25, 2008
