Calculating Your Roth IRA Maximum Contribution
Published in Rules
How much you can contribute to a Roth IRA depends on your income and the contribution limits of the year. For 2008, the contribution limits for a Roth IRA is $5,000. Follow these rules to determine your maximum Roth IRA contribution.
- If your adjusted gross income is under $5,000, you can only contribute your AGI,
- If your AGI is greater than $5,000 but less than $101,000 (single filers) or $159,000 (for married filing jointly filers), then your maximum contribution is $5,000.
- If your AGI is between $101,000-$116,000 (single filers) or $159,000-$169,000 (for married filing jointly filers), then you can contribute a fraction based on where your income is with a few special rules:
If your AGI as a single filer was $110,000, then your fraction is ($110,000 - $101,000) / $15,000 (the range) = 0.6. Then take 0.6 x $5,000 = $3,000. Your contribution limit is $3,000.
Special Rules:
First, your limit is always in increments of $10 rounded up. The above example was a nice round number but your AGI is probably not a round number, so you always round up.
Also, the minimum maximum contribution amount is $200. So, if your AGI is within 4% of the maximum, then you get credit for the 4% ($200).