Roth IRA Income Limits

The Roth IRA income limits make it harder for you to contribute to your Roth IRA if you are a highly compensated employee. The Income limits for Roth IRA are as follows.

Single Filers

If you are single and filer in 2010 you may contribute the maximum amount to your IRA provided you earn under $105,000 a year.

If you earn more than this the amount you can contribute becomes less and less to the point where if you make over $120,000 dollars a year you cannot contribute to your Roth IRA at all.

Joint Filers

If you joint file your taxes with your spouse the rules are a little different. You can contribute the full amount into your Roth IRA provided you earn less than $167,000 combined for 2010.

Anything above this means the amount you can contribute becomes less and less. If your combined income is over $177,000 then you cannot contribute to your Roth IRA.

Increase in Income

What happens if you have a Roth IRA and go over the income limit? If you get a raise or a promotion and have recently gone over the income limit you may be wondering what happens to your old Roth IRA.

Well, if you are over the limit it only affects that year. This means all the money you invested into your Roth IRA previously will remain there and continue to grow, you just cannot contribute anymore into it.

If something changes in the future such as the income limit goes up or you get married then you may be able to contribute to it once again. But until that day it is simply an asset on the side that you can’t add to.

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