A:

The 2007 and 2008 income limits for Roth IRA contributions are as follows:

Situations 2007 2008
Individuals who are married and file a joint tax return $166,000 $169,000
Individuals who are married, file a separate tax return and lived with their spouse at any time during the year, AND $10,000 $10,000
Individuals who file as single, head of household or married filing separately and did not live with their spouse at any time during the year $114,000 $116,000

If your income is less than these amounts, you may contribute the full amount of $5,000 ($6,000 if you are at least age 50 by the end of the year for which the contribution is being made).

If your modified adjusted gross income (MAGI) falls within a certain range, you may not be able to contribute up to the full contribution limit. You must use a formula to determine the maximum amount you may contribute to a Roth IRA.

These ranges are as follows:

Situations 2007 2008
Individuals who are married and file a joint tax return $156,000 to $166,000 $159,000 to $169,000
Individuals who are married, file a separate tax return and lived with their spouse at any time during the year, AND 0 to $10,000 0 to $10,000
Individuals who file as single, head of household, or married filing separately and did not live with their spouse at any time during the year $99,000 to $114,000 $101,000 to $116,000

If your income falls within these ranges, you may use IRS publication 590 to assist you with the calculation or consult with your tax professional.

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS
  1. Can I file single if I am legally married but have not lived with spouse for two ...

  2. Can I now contribute to a tax-deductible IRA if I lost my job, where I had contributed ...

    Also, my wife is employed and contributes to a 401k. My age is 57. ... Read Answer >>
  3. We are in a 401(k) at work. Can we also do a Roth each year? If we can, can it also ...

    Participation in a 401(k) or any other employer plan does not affect your ability to establish and/or fund (or participate ... Read Answer >>
  4. Can I still contribute to my Roth IRA if my spouse earns over the requirement cap?

    My spouse makes over the amount allowed to contribute to a Roth IRA. However, I do not. Is it possible... Read Answer >>
  5. Can I contribute to my independent Roth?

    I am 69 years old. I am working full time and contribute $8,000 of my income to my company's 401k. My total income ... Read Answer >>
  6. Can I add my higher income spouse's name to my Roth IRA in order to raise our contribution ...

    IRS rules prevent you from maintaining joint Roth IRA accounts. However, you may accomplish your goal of contributing larger ... Read Answer >>
Related Articles
  1. Retirement

    Roth IRA Contribution Rules: The Basics

    What you need to know about Roth IRA contributions – from eligibility to dollar limits, deadlines to tax breaks.
  2. Retirement

    IRA Contribution Limits in 2016

    Find out about the 2016 limits for contributions and income thresholds for individual retirement accounts, including traditional IRAs and Roth IRAs.
  3. Retirement

    Top Reasons to File Separately When Married

    Most of the time, it makes sense for couples to file their taxes jointly. Except for these possible exceptions...
  4. Retirement

    Don't Make These Top 10 Mistakes On Your Roth IRA

    Don't lose out on the benefits of a Roth by contributing too much, breaking rollover rules or making other avoidable errors.
  5. ETFs & Mutual Funds

    IRAs and Roth IRAs

    What IRAs are: Tax-advantaged savings accounts for individuals. Pros: Tax benefits; investments grow tax-deferred and contributions may be deductible; numerous investment choices with range of ...
  6. Retirement

    These IRA Contributions Will Cut Your 2015 Taxes

    No matter how you save for retirement, take advantage of the time between now and April 15, 2016, to add to your nest egg while cutting your tax bill.
  7. Financial Advisor

    2016 Tax Code Changes Add Some Wiggle Room

    It's never too early to prepare for tax season. Next year features a host of tax law changes. Check our handy list to see which ones apply to you.
  8. Financial Advisor

    IRAs: Top Things You Need to Know About Them

    By understanding the major rules for both traditional and Roth IRAs, you'll be prepared to enjoy the benefits of these investment opportunities.
  9. Retirement

    Maxed Out Your 401k? Here's What to Do Next

    Maxed out your 401(k)? Don't stop there. Here are some options to keep saving toward retirement.
  10. Personal Finance

    Income Tax Brackets for 2015-2016

    Learn about the 2015-2016 tax brackets, how to calculate your marginal tax rate, the five types of filing status and how to qualify for them.
RELATED TERMS
  1. Separate Return

    A separate Form 1040, or a variant thereof, filed by a married ...
  2. Married Filing Jointly

    A filing status for married couples that have wed before the ...
  3. Joint Return

    A U.S. income tax return filed on behalf of a married couple, ...
  4. Married Filing Separately

    A filing status for married couples who choose to record their ...
  5. Spousal IRA

    A type of individual retirement account that allows a working ...
  6. Individual Tax Return

    The type of tax return filed by an individual. Both single and ...
Hot Definitions
  1. AAA

    The highest possible rating assigned to the bonds of an issuer by credit rating agencies. An issuer that is rated AAA has ...
  2. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  3. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  4. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  5. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  6. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
Trading Center