The Income Limits of Roth Ira
Many people are interested to pay their contribution to Roth Ira. However, the Congress limits their contribution according to income. A particular taxpayer must contribute the maximum or highest amount listed only if the “Modified Adjusted Gross income” or (MAGI) is lower than the certain level. Or else, there will be a phase-out on the contributions that run proportionally all the way through the MAGI ranges that are shown below.
When MAGI hits the peak of the range, then there is no contribution allowed. Nevertheless, a minimum of two hundred dollars can be given when MAGI is lower the top of the range. Then, excess contributions will be characterized as traditional contributions if the mixed contributions do not possibly surpass the tax limit on that certain year.
You can be interested to look at the MAGI ranges for ROTH IRA for 2012 below:
· Joint Filers: Reaches up to one hundred seventy-three thousand dollars (this will allow one to qualify in paying full contribution);
· Married Filing individually (when the couple already lived together for one year); zero dollar (to be able to qualify on a full contribution); zero dollar to ten thousand dollar (to become eligible on partial contribution
· Single Filers: Reaches up to one hundred ten thousand dollars (to be able to be eligible in paying a complete contribution
In order for one to be eligible in Roth Ira, he should be certain in meeting the minimum requirement for the income that is earned. One must have a continuous contribution and taxable compensation, but not the taxable income that come from investments. If a person only has two thousand dollars as part of the taxable compensation, then the maximum contribution of IRA will be two thousand dollars.
Now, you have learned more about the income limits of Roth Ira.