Roth IRA Limits

Roth IRA is some of the most popular saving schemes today. There are a few Roth IRA limits set by the Congress regarding contributions. However, the advantage of this plan is that the tax payer, after passing the eligibility criteria, is able to contribute with a part of his or her compensation income directly to the Roth IRA account, while the savings that grow in this account will be tax-free. It is important to note that the tax benefits are enhanced when the individual withdraws amounts of moneyfrom the account. Also, these withdrawals are subject to some limits in order to be declared tax-free. To begin with, an individual who has passed 59 and half years of age or has suffered some disabilities will be able to make withdrawals after a period of only five years. Also, an individual can benefit of a tax-fee withdrawn if he or she can prove that the money will be used for buying, building or rebuilding their first home.

Roth IRA limits represent the limitations based upon income, set by the Congress concerning those who can contribute to a Roth IRA. Thus, in one financial year one individual can not contribute more than 4 thousand dollar or 100% of his ore her adjustable income, whichever is lesser. Any tax payer can contribute the maximum amount listed at the top of the pageon the Modified Adjusted Gross Income, also known as MAGI, only if this amount is below a certain level, otherwise a phase-out of allowed contributions is supposed to run through some sets of MAGI ranges. In case the MAGI reaches to the top of the range, noother contribution will be allowed. The ranges for this year are the following:

• For single filers – up to 99 thousand dollars for qualifying for full contribution and between 99 thousand to 114thousand dollar for eligibility for partial contribution
• For multiple filers – up to 156 thousand dollar for qualifying for full contribution and between 156 and 166 thousanddollar for eligibility for partial contribution.