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The Roth IRA Contribution Phaseout for 2006 and 2007
By JLP | December 7, 2006
For 2006, the Roth IRA contribution phaseout is as follows:
Filing Status: Married Filing Jointly & Qualifying Widow(er)
The phaseout based on your modified adjusted gross income (MAGI) is $150,000 – $160,000
Filing Status: Single, Head of Household, or Married Filing Separately
The phaseout, again based on your modified adjusted gross income (MAGI) is $95,000 – $110,000
If your MAGI is below the low end of the phaseout, you can make a full contribution. If your MAGI falls within the phaseout, your contribution will be reduced. If your MAGI is above the upper limit of the phaseout, you cannot contribute to a Roth. However, you can still contribute to a non-deductible Traditional IRA, which you might be able to convert to a Roth IRA in the future.
For 2007, the Roth IRA contribution phaseout is EXPECTED to be the following:
Filing Status: Married Filing Jointly & Qualifying Widow(er)
The phaseout based on your modified adjusted gross income (MAGI) is $156,000 – $166,000
Filing Status: Single, Head of Household, or Married Filing Separately
The phaseout, again based on your modified adjusted gross income (MAGI) is $99,000 – $114,000
It’s good to see them raise the phaseout threshhold. Personally, I think it is silly to have a phaseout in the first place since the MOST a person can contribute is $4,000 ($5,000 if over age 50).
Topics: IRAs, Retirement Planning, Roth IRA, Tax Planning, Taxes | 4 Comments »
December 8th, 2006 at 5:49 pm
I would love to be able to contribute to my Roth IRA, but my wife and I are above the cutoff. You are right, JLP, it would be great to just eliminate the MAGI cap, but I’m not holding my breath.
December 11th, 2006 at 10:25 am
[...] JLP goes over the Roth IRA income phase-out periods. [...]
December 11th, 2006 at 8:52 pm
[...] My taxes will go down in retirement. – Congress can change taxes pretty much on a whim. Therefore you shouldn’t assume that they are going to go down during retirement. You can help yourself out by setting up a < ahref=”http://allfinancialmatters.com/category/retirement-planning/iras/roth-ira/”>Roth IRA. [...]
December 13th, 2006 at 1:13 pm
Question: Is MAGI your income minus say 401k contributions and other pre-tax contributions?