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Roth IRA contribution limits for the 2023 and 2024 tax years are determined by several factors:
- The annual IRA contribution limits set by the IRS.
- The amount of earned income you have for the year.
- The level of your income and tax filing status for the year.
IRA contribution limits for 2023 and 2024
| 2023 | 2024 | |
|---|---|---|
Less than age 50 | $6,500 | $7,000 |
Catch-up age 50 or over | $1,000 | $1,000 |
Contributions for a given tax year can be made up to the tax filing date, with no extensions.
Requirements to contribute to a Roth IRA
In order to be able to contribute to an IRA, either Roth or traditional, you must have earned income. You cannot contribute an amount greater than the amount of your earned income for the tax year.
In the case of a Roth IRA, there are income limitations. Based on your income and filing status these income limitations may prohibit you from making a Roth IRA contribution entirely or limit your contributions to some level beneath the annual IRA contribution limits for the year.
Income limits
For tax years 2023 and 2024, here are the income limits that govern whether or not you are able to contribute to a Roth IRA. These income limits are based on a taxpayer’s modified adjusted gross income (MAGI).
The income limits for 2023 and 2024 are:
| Filing status | 2023 modified AGI limits | 2024 modified AGI limits | Contribution limits |
|---|---|---|---|
Married filing jointly and qualifying widow(er) | Less than $218,000 | Less than $230,000 | Up to the limit |
$218,000 but less than $228,000 | $230,000 but less than $240,000 | Reduced, phased out | |
$228,000 or more | $240,000 or more | No contributions allowed | |
Single, head of household or married filing separately (if you did not live with your spouse at any point during the year) | Less than $138,000 | Less than $146,000 | Up to the limit |
$138,000 but less than $153,000 | $146,000 but less than $161,000 | Reduced, phased out | |
$153,000 or more | $161,000 or more | No contributions allowed | |
Married filing separately (if you lived with your spouse at any point during the year) | Less than $10,000 | Less than $10,000 | Reduced |
$10,000 or more | $10,000 or more | No contributions allowed |
How your Roth IRA contribution limit is calculated
There are two components to consider in calculating the amount you can contribute to a Roth IRA.
The first consideration is the overall IRA contribution limit. For 2024, the limit is $7,000 for those under age 50, plus an extra $1,000 catch-up contribution for those who are 50 or older. Assuming that your earned income is at least this much, there is no restriction on the amount you can contribute to an IRA account for the year.
As far as your ability to contribute to a Roth IRA, this may be limited or prohibited based on the income limits outlined in the chart above. Let’s look at an example.
Sam is 42 years old and single. She will have a MAGI of $145,500 for 2023. The maximum Sam can contribute to a Roth IRA for 2023 is $3,250. This is calculated as 50% of the $6,500 limit. Her income is in the middle of the income range of $138,000 to $153,000 for 2023 for her filing status.
If Sam wants to make the full IRA contribution for the year, she will be limited to an after-tax contribution to a traditional IRA for the remaining $3,250 as her income is too high to do a pre-tax contribution since she is covered by a 401(k) plan by her employer.
Sam has until tax-filing day—April 15 in 2024—to make her IRA contributions to either or both accounts.
The consequences of contributing too much to a Roth IRA
If you find that you have contributed too much to a Roth IRA for the year, you have several options to correct this. Note that over contributing to a Roth IRA for the year can trigger an IRS penalty.
If you discover the error prior to filing your return for that tax year, you can withdraw the excess contributions and any related earnings on those contributions. If you have already filed your return, you have a six month “grace period” to withdraw the excess contributions and any related earnings and then file an amended tax return.
In either case, you will pay any taxes that will be due based on these withdrawals, but there will be no IRS penalty.
Another option is to reduce your contribution by the amount of the excess for the following tax year. This will, however, result in a penalty on the excess amount, but this penalty will remain in effect each year that the excess amount remains in the Roth IRA.
You should keep track of all Roth and traditional IRA contributions made for the year. If you find that you have contributed too much you should consult with the IRA custodian and with your tax professional for advice on how to correct the issue.
If impacted by this situation, you might find information on the Turbotax site or perhaps you can engage one of their tax experts.
Age contribution limits
The annual IRA contribution limits are divided into a limit for those under 50 and those over age 50. For 2024 the limit is $7,000 for those under 50 (it was $6,500 in 2023). There is an additional $1,000 catch-up contribution limit for those who are age 50 or over at any point during the calendar year (same amount for both 2023 and 2024).
There is no upper end age limit at which IRA contributions can no longer be made. There has never been an age limit on the ability to make a Roth IRA contribution, but prior to the passage of the Secure Act in 2019 there was an age limit on traditional IRA contributions of 70½.
Regardless of age, the income limitations by filing status can serve to limit the ability to make Roth IRA contributions. The requirement of having earned income also applies. For example, if your only income is from a pension or your investments, this would not qualify as earned income and you would not be able to contribute to an IRA whether Roth or traditional.
Roth IRA contribution limits: More to know
Here are a few additional things to know in connection to Roth IRAs.
Spousal Roth IRA
A non-earning spouse can contribute to a Spousal Roth IRA if the couple files as married and joint. The contributions cannot be more than their reported earned income and their MAGI must meet the requirements for their filing status in order to be able to contribute to a Roth IRA. Each spouse will have their own separate account. They can each contribute up to the maximum contribution they qualify for.
Saver’s credit
The Retirement Savings Contributions Credit or Saver’s Credit provides a credit on your tax return for contributing to a retirement account. This credit is available to low- or moderate-income taxpayers for contributing to a retirement plan, including a Roth IRA.
The amount of the credit is 50%; 20%; or 10% of your contributions to the Roth IRA based upon your adjusted gross income. The maximum qualifying contribution is $2,000 or $4,000 for a married couple filing jointly. This means the maximum credit is $1,000 for an individual, $2,000 for a married couple filing jointly.
2023 Saver’s Credit levels:
| Credit amount | Married filing jointly | Head of household | All other filers* |
|---|---|---|---|
50% of your contribution | AGI of not more than $41,000 | AGI of not more than $30,750 | AGI of not more than $20,500 |
20% of your contribution | $41,001 - $44,000 | $30,751 - $33,000 | $20,501 - $22,000 |
10% of your contribution | $44,001 - $68,000 | $33,001 - $51,000 | $22,001 - $34,000 |
0% of your contribution | Over $68,000 | Over $51,000 | Over $34,000 |
\ *Single, married filing separate, qualifying widow(er)
2024 Saver’s Credit levels:
| Credit amount | Married filing jointly | Head of household | All other filers* |
|---|---|---|---|
50% of your contribution | AGI of not more than $46,000 | AGI of not more than $34,500 | AGI of not more than $23,000 |
20% of your contribution | $46,001 to $50,000 | $34,501 to $37,500 | $23,001 to $25,000 |
10% of your contribution | $50,001 to $76,500 | $37,501 to $57,375 | $25,000 to $38,250 |
0% of your contribution | Over $76,500 | Over $57,375 | Over $38,250 |
*Single, married filing separate, qualifying widow(er)
CARES Act
The CARES Act allowed for the withdrawal of up to $100,000 from a traditional or Roth IRA account and waived the payment of a 10% early withdrawal penalty if it would normally apply. This act was enacted in 2020 and allows for the payment of any taxes on the withdrawal to be paid over a three year period. Year three was 2022. This could have impacted certain non-qualified withdrawals from a Roth IRA.
Roth IRA alternatives
For those who cannot contribute to a Roth IRA due to income constraints—or who are otherwise looking for another option—there are several they can consider.
- If their employer offers one, a Roth 401(k) or Roth option in a similar type of workplace retirement plan allows for contributions to a Roth account. The annual contribution limits are higher than with a Roth IRA and there are no limitations on the ability to contribute based on your income.
- A backdoor Roth IRA involves the after-tax contribution to a traditional IRA followed by a conversion of that contribution to a Roth IRA. Some of the converted amount may be taxable.
- A mega backdoor Roth may be offered by your employer. This allows you to contribute to the 401(k) plan on an after-tax basis over and above the annual employee contribution limit. Depending upon the rules of the plan, you may be able to convert these funds to a Roth option inside of the plan, take an in-service withdrawal and convert the funds to a Roth IRA outside of the plan, or wait until you separate from service with the employer and then roll the funds to a Roth IRA. As with any type of Roth conversion, there may be taxes associated with the transaction.
Frequently asked questions (FAQs)
Can I contribute to a Roth IRA if my income is too high?
If your income is too high, your ability to contribute to a Roth IRA may be limited or prohibited altogether. There are alternatives to fund a Roth IRA, such as a Roth IRA conversion or a backdoor Roth IRA, that can be considered as well.
Will contribution limits increase in 2024? The IRA contribution limits have increased from $6,000 in 2022, $6,500 in 2023, and to $7,000 in 2024. In all three years, those who are age 50 or older can contribute an additional $1,000 catch-up contribution to an IRA.
The income restrictions that limit or prohibit the ability to contribute to a Roth IRA have been increased for 2024 over the 2023 limits as well. Please see the chart that appears earlier in this article.
Is it smart to max out a Roth IRA every year?
This will vary from investor to investor. Whether a traditional or Roth IRA, contributing as much as possible is generally a good way to build up your retirement savings. This is a good question for a financial advisor; one way to connect to one is via the SmartAdvisor site.
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