The limits of a Roth IRA contributions depend on three factors: income, age and marital status, according to RothIRA.com. The money contributed must be from earned income. The contribution limit in 2014 was $5,500 for those under 50.Continue Reading
For a single individual under the age of 50 with an adjusted gross income of $114,000 or less, the contribution limit to a Roth IRA is $5,500, states the IRS. For the same individual with an income between $114,001 to $129,000, use IRS worksheet 2-2 from IRS publication 590 to determine the reduced contribution limit. The same individual with an income exceeding $129,000 would not be allowed to contribute to a Roth IRA.
For a married couple filing separately, a reduced amount can be contributed to a Roth IRA if the AGI is less than $10,000, reports RothIRA.com. If the AGI is more than $10,000, the married couple cannot contribute to a Roth IRA. If a married couple is filing separately, and have not lived together during the year, they can follow the same guidelines as single filers.
A married couple filing jointly, or a qualifying widow or widower, with an AGI income less than $183,000 can contribute up to the $5,500 limit, according to RothIRA.com. The same couple with an income greater than $183,000 but less than $193,000 can contribute a reduced amount. If the AGI income is greater that $193,000, the couple cannot contribute to a Roth IRA. For individuals age 50 or older, the same guidelines apply; however, they are allowed to contribute an extra $1,000 per year, to catch up on retirement investments.Learn more about Financial Planning
Roth IRA contributions can be withdrawn at any time for any reason, however, any investment earnings taken out before age 59 1/2 result in a penalty unless it is for a qualifying reason, according to CNN. The fastest way to withdraw contributions is to request an ACH transfer.Full Answer >
A Roth IRA offers several benefits, including earnings that grow tax free and contributions that are always penalty and tax free, according to Schwab. Once the account has been opened for 5 years and the account owner is at least 59.5 years old, the earnings in the account are always free of taxes and penalties. Moreover, distributions are not required at any age unless the account holder opts to take them, and there is no age limit for starting a Roth IRA.Full Answer >
An investor can withdraw his Roth IRA contributions at any time without tax or penalty. To withdraw earnings or interest the Roth IRA earns without paying taxes, he must be at least 59 1/2 and the Roth IRA must be at least 5 years old.Full Answer >
For taxpayers age 49 and under, the maximum Roth IRA contribution for tax years 2014 and 2015 is the lesser of the taxpayer’s taxable compensation for the year or $5,500, according to the IRS. This amount is $6,500 for taxpayers aged 50 or over on or before December 31st.Full Answer >