The basics of how your income affects your Roth IRA income limits 2011 have been briefly discussed in our article : Roth IRA Contribution Limits 2011. 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.
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:
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 Roth IRA Income Limits that you fall under in 2011.
Roth IRA Income Limits 2011
The following are the limits that determine how much you can contribute to your Roth IRA in 2011. Once you know what bracket you fall under you can determine your Roth IRA maximum contribution amount.
** All figures refer to your MAGI
Roth IRA Income Limits 2011 – Single:
Under $107,000: You can contribute the maximum
In-between $107,000 – $122,000: You can contribute a reduced amount from the maximum
Over $122,000: You are not allowed to contribute to your Roth IRA
Roth IRA Income Limits 2011 – Married Filing Jointly:
Under $169,000: You can contribute the maximum
In-between $169,000 – $179,000: You can contribute a reduced amount from the maximum
Over $179,000: You are not allowed to contribute to your Roth IRA
Roth IRA Income Limits 2011 – Married Filing Separately:
In-between $0 – $10,000: You can contribute a reduced amount from the maximum
Over $10,000: You are not allowed to contribute to your Roth IRA
Roth IRA Income Limits 2011 Summary
Once again, now that you know more about your Roth IRA income limits in 2011, you can determine which bracket you fall into, please refer to our other articles to determine your Roth IRA maximum contribution amount or refer back to our homepage to find articles about your Roth IRA Contribution Limits.