How to Calculate Your Reduced Roth IRA Contribution Limit

For 2006, the contribution phaseout for Roth IRA Contributions using the following Modified Adjusted Gross Income (MAGI) ranges are:

For those filing Married Filing Jointly:

MAGI of $150,000 to $160,000 (for 2007 this range is expected to be $156,000 to $166,000)

For most Single Filers:

MAGI of $95,000 to $110,000 (for 2007 this range is expected to be $99,000 to $114,000)

What this means is that if you are married filing jointly and your MAGI is LESS THAN $150,000, you can contribute the maximum to a Roth IRA ($4,000 or $5,000 if you are over 50 years old). If your MAGI is over $150,000 but less than $160,000, your contribution will be phased out. If your MAGI is over $160,000, you CANNOT contribute to a Roth IRA (but you can still contribute to a non-deductible traditional IRA).

5 thoughts on “How to Calculate Your Reduced Roth IRA Contribution Limit”

  1. Spender,

    Roth IRA contributions ARE taxed. However, as long as the contributions are invested for at last least 5 years and you are over 59 1/2 (with certain exceptions), withdrawals are tax free.

  2. We’ve run up against the MAGI limit the last two years. We got under it by using my wife’s self-employed 401K and funding it to the max.

    Getting under the MAGI for funding Roths is a good reason to up the 401K contribution if you’re “on the bubble”.

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