Location

Roth IRA

Who may contribute? How much may I contribute? What are the tax advantages?

Anyone who has income from compensation or who is filing jointly with a spouse who earns compensation with the following MAGI:*

  • Up to $120,000 for single filers
  • Up to $177,000 for joint filers

*MAGI Modified Adjusted Gross Income from the federal tax form
  • $5,000 for 2011
  • For IRA holders age 50 and older, your limits increase to $6,000 for 2010
  • Cannot exceed compensation
  • Reduces contributions that may be made to Roth IRAs
  • Earnings are tax-free if account is open for five years and withdrawn for a qualified reason (age 59 1/2, disability, death, or a first-time home purchase**)
  • Not required to start withdrawals at age 70 1/2

**Lifetime limit for exemption on a first-time home purchase is $10,000