Roth IRA Income Limits

The basics of how your income affects your Roth IRA income limits 2011 have been briefly discussed on the homepage when looking at contribution limits. This article will give you much more detail specifically as to how to determine your taxable income, why it is important, and how this affects your contribution amounts.

Taxable Income

Having a Roth IRA is a great opportunity to set yourself or your family up for retirement, and given the importance of this, the opportunity is geared more towards lower-middle income citizens.

The important thing to note is that when we talk about your taxable income in regards to your Roth IRA, we are talking about your Modified adjusted gross income (MAGI), which is how we will refer to it from now on.

Modified Adjusted Gross Income

Your MAGI is extremely important for determining the limits on your retirement account contributions.

Determining your MAGI

Your MAGI is determined through use of your 1040 or 1040A tax form (here is a link to the 1040A form http://www.irs.gov/pub/irs-pdf/f1040a.pdf).

You will get your MAGI starting from line 21(line 38 of form 1040) which is your adjusted gross income, at the bottom of the front page as shown here:

Modified Adjusted Gross Income Form

Once you have this figure you need to add the following 5 figures to it to determine your MAGI:

  • The deductions you’ve taken for IRA contributions
  • The deductions applied to student loan interest or tuition
  • Any foreign income that has not been reported thus far
  • Any interest from EE savings bonds that is used for a schooling related expense
  • Any employer contributions to adoption expenses if applicable

If you are filing jointly as married, simply add your 2 MAGI’s together to get the your joint MAGI.

Roth IRA Income Limits 2013

The following are the limits that determine how much you can contribute to your Roth IRA in 2013.  Once you know what bracket you fall under you can determine your Roth IRA maximum contribution amount.
** All figures refer to your MAGI

The criteria that determine the income limits for your Roth IRA are re-evaluated every year along with the other factors that affect your Roth IRA contribution limits. However, your income limits are probably the most important change every year because you need to know if you are eligible to contribute or not, and if so how much.

Roth IRA Income Limits 2012

Read this article carefully, and try to make sure you understand everything clearly; it is really important because if you do not understand your income limits you may determine your limits wrong and it could lead to penalties if you contribute too much. If you are having trouble understanding something or are confused, leave a comment at the bottom of the page and I will clear it up for you as soon as possible.

Determining Your 2013 Contributions

As of now, the official income limits for 2013 have been released by the IRS, and all the following information is up to date.  These apply for any contributions up until April 15, 2014.

  • The lower cutoff for singles in 2012 was $110,000, which meant if you had a MAGI less than this amount you had the potential to contribute the maximum; the lower cutoff has risen in 2013 to $112,000.  Likewise, the upper limit (where you are not allowed to contribute at all if your income exceeds it) is $127,000 in 2013.
  • The lower cutoff as discussed above for married couples was $173,000 in 2012.  This amount is the sum of both partner’s MAGI and if you make less you are able to fully contribute to your Roth IRA.  The upper limit was $183,000, and if your combined MAGI were in-between that amount you would be able to contribute, but just a reduced amount.  The lower and higher cutoff values in 2013 are $178,000 and $188,000 respectively.
  • Finally, the last filing option you have is filing married but separated.  If you recall, this is the strictest category for filing because the IRS wants to make sure people are not abusing the system.  The cutoff remains the same as in 2012 which was $10,000.  If your MAGI is more than this you will not be allowed to contribute.  If you make less than you are able to contribute up to your maximum, unfortunately you probably won’t have much available.

So there you have it, all the current information on your Roth IRA Income Limits 2013, check back any time for the most up to date information.

Roth IRA Income Limits 2014 Update

If you’re already looking ahead to 2014 way to go!  Unfortunately more information about Roth IRAs haven’t been released by the IRS yet.  Based on historic releases, I expect the information to be available as early as December of 2013, or more likely by the end of January 2014 at the latest.  I encourage you to bookmark this page and check back periodically for any updates.