The Roth IRA Contribution Phaseout for 2006 and 2007

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).

4 responses to The Roth IRA Contribution Phaseout for 2006 and 2007

  1. 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.

  2. Question: Is MAGI your income minus say 401k contributions and other pre-tax contributions?

Trackbacks and Pingbacks:

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