Ask Money


Chris Farrell Mar 26, 2010

Question: What is the household income limit of husband and wife that prevents either of them to contribute to Roth IRA? My husband and I both have 401K and 403b which we contribute to the maximum allowable, but we want to contribute to Roth IRA too, however we were told that there is an income limit to contribute to Roth IRA. Please help us to understand this matter. Thank you. Twan, San Diego

Answer: Yes, there is an income limit. To make a full Roth contribution of $5,000 ($6,000 if 50 and over) your modified gross adjusted income has to be $166,000 or lower for married couple filing jointly. The income limit phases out up to $176,000. If your MAGI is above that figure you can’t contribute to a Roth. For single filers the full contribution limit is $105,000. The phase-out for single filers is between $105,000 and $120,000.

The key is your modified gross adjusted income. According to the tax guide, your adjusted gross income is the amount on your tax return before you claim the standard deduction, any itemized deductions, or the deduction for personal exemptions. Your “modified” adjusted gross income starts from this number and makes certain additional changes, such as taking into account IRA contributions and deductions. Fairmark has a good guide on everything you ever wanted to know–or didn’t–about Roth-IRAs here.

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