The Internal Revenue Service announced the Roth Individual Retirement Account contribution limits. Every year, the IRS updates the figures as there are changes to the cost of living.
For the 2022 tax year, the Internal Revenue Service hasn’t moved the Roth IRA contribution limits. It remains unchanged at $6,000. If you’re 50 or older, you get an additional $500 to contribute to your retirement savings.
There aren’t changes to the maximum contribution limits, but minor adjustments are made depending on the modified adjusted gross income of the taxpayer. The same as the IRA contributions deduction, taxpayers are subject to a limit based on their modified adjusted gross income.
MAGI limits on Roth IRA contributions
Married filing jointly
If your filing status is married filing jointly or qualifying widow(er), the following restrictions apply on Roth IRA contributions.
MAGI under $204,000 qualifies for the maximum contribution limit.
MAGI between $204,000 and $214,000 qualifies for a reduced contribution limit.
MAGI over $214,000 can’t contribute to Roth IRA.
Married filing separately
If your filing status is married filing separately, the following restrictions apply on Roth IRA contributions.
MAGI under $10,000 qualifies for a reduced contribution limit.
MAGI over $10,000 can’t contribute to IRA.
Single, heads of households, and married filing separately
Only married filers who didn’t live with their spouse at any time during the tax year qualify for the following.
MAGI under $129,000 qualifies for the maximum contribution limit.
MAGI between $129,000 and $144,000 qualifies for a reduced contribution limit.
MAGI over $144,000 can’t contribute to Roth IRA.
What is my modified adjusted gross income?
There aren’t many uses of the modified adjusted gross income, unlike the AGI. But, it’s still a good way for the Internal Revenue Service to decide on certain things like the Roth IRA contribution limits or the tax write-offs you get for traditional IRA contributions.
The modified adjusted gross income refers to excluding specific adjustments made to the gross income. To figure out modified adjusted gross income, calculate your AGI and add back the following adjustments.
- IRA contributions deduction (only for traditional IRA)
- Passive income or loss
- Rental losses
- Adoption expenses
- Partnership losses
- Taxable Social Security payments deduction
- Excluded foreign income
- Interests from EE savings bonds used for paying college and university expenses
After adding these back to your adjusted gross income, you will know your modified adjusted gross income and figure out whether or not you get to contribute up to the contribution limit or at a reduced amount or not at all.