Roth IRA contribution limits depend on each taxpayer’s Adjusted Gross Income (AGI) and filing status. We simplify Roth IRA contribution limits below.
- Traditional IRA Contribution Limits
- Roth IRA Contribution Limits
- SIMPLE IRA Contribution Limits
- SEP IRA Contribution Limits
- Traditional 401k Contribution Limits
- Roth 401k Contribution Limits
- One-Participant 401k Contribution Limits
- Coverdell ESA Contribution Limits
- HSA Contribution Limits
Roth IRAs vs Traditional IRAs
The difference between Roth IRAs and traditional IRAs is that withdrawals from Roth IRAs are tax deductible, while withdrawals from traditional IRAs are not. Meanwhile, contributions to Roth IRAs are not tax deductible, but contributions to traditional IRAs are. Roth IRAs are still seen as the better choice. That’s because Roth IRAs tax the invested money early, before it grows. Traditional IRAs tax the money later, after it grows. Naturally, taxing money early when it’s smaller results in less tax overall. As a result, Roth IRAs usually deliver a lower tax bill.
Both Roth IRAs and traditional IRAs have contribution limits. They also have limits on the amounts of the contributions that can be used as tax deductions. We round up the details below.
Roth IRA Contribution Limits
Roth IRA contribution limits depend on income level and filing status. They start out by using the limits on traditional IRA contributions as a base. The base limits on Roth IRA contributions are:
- Roth IRA contribution limit for 2015 under age 50: $5,500
- Roth IRA contribution limit for 2015 age 50 or older: $6,500
- Roth IRA contribution limit for 2014 under age 50: $5,500
- Roth IRA contribution limit for 2014 age 50 or older: $6,500
Other Roth IRA Contribution Limits
As with traditional IRAs, Roth IRA contributions are also limited by the amount of taxable income. For example, a taxpayer with an adjusted gross income of $2,000 can only contribute $2,000 to their Roth IRA in that year.
One exception to this rule is that a taxpayer with no taxable income can still contribute to a Roth IRA if their spouse had taxable income. In this case, the couple must file jointly and their IRA contribution limits are figured from their combined adjusted gross income.
Income Based Roth IRA Contribution Limits
Additional IRA contribution limits come into play for Roth IRAs whose owners make above a certain annual income. The table below explains:
As the table above explains, married couples who file jointly and have a combined Adjusted Gross Income less than $183,000 have no additional IRA contribution limits. Married couples filing jointly with incomes between $183,000 and $193,000 face reduced contribution limits. Married couples who file jointly and have incomes even higher aren’t allowed to make IRA contributions at all.
Married couples who file separately and make more than $10,000 per year can’t contribute to IRAs. Most married couples with IRAs therefore file jointly.
For individuals, anyone with annual Adjusted Gross Income less than $116,000 can contribute the full amount. Those individuals with incomes from $116,000 to $131,000 can only contribute reduced amounts, and those with incomes above $131,000 can’t contribute to IRAs at all.
Anyone in the phaseout ranges between $116,000 and $131,000 or between $183,000 and $193,000 should figure their reduced contribution amount in IRS Worksheet 2-1 in IRS Publication 590.
Roth IRA Deduction Limits for Those With 401k Plans
Taxpayers with retirement plans through an employer like 401k plans can contribute up to the regular limit. However, they face additional limits on the amounts they can deduct from their taxes. The table below explains:
Basically, individuals who make less than $61,000 a year can deduct the full $5,500 per year of their Roth IRA contributions. For married couples filing jointly, this income threshold is set at $98,000. For married couples filing separately it’s set at $10,000, which is why most married couples with IRAs file jointly.
Individuals who make between $61,000 and $71,000 per year face a reduced deduction amount. Married couples filing jointly face reduced deduction amounts when their AGI is between $98,000 and $118,000.
Taxpayers who find themselves in these “phaseout” income levels can figure their allowed IRA deduction amounts by completing the IRA deduction worksheet in the instructions for form 1040.
Roth IRA Contribution Limit Restrictions and Deadlines
While people over the age of 70 1/2 who have traditional IRAs aren’t allowed to contribute, there is no such age limit on Roth IRA contributions.
IRA contributions in excess of IRA contribution limits are taxed by the IRS at a rate of 6% per year.
IRA contributions for any year can be made until April 15th of the following year. For instance a taxpayer contributing to an IRA in 2015 has until April 15th of 2016.
To compare, check out our article on traditional IRA contribution limits.