The Wall Street Journal-20080116-Ask Personal Journal
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Ask Personal Journal
Q: What does "income" mean for purposes of the Roth IRA income limits?
-- Ruth MacNaughton, Oakland, Calif.
A: The income used to determine if you are eligible to contribute to a Roth individual retirement account is what's known as "modified adjusted gross income," says Ed Slott, a Rockville Centre, N.Y., IRA adviser. That's essentially adjusted gross income, which covers virtually all your income, with a few tweaks. For instance, it excludes income from Roth IRA conversions. See IRS publication 590 at www.irs.gov. For tax year 2007, you can't make a full contribution to a Roth IRA of $4,000 (or $5,000 if you're 50 or over) if your income exceeds $99,000 for a single filer, or $156,000 for a joint filer. For tax year 2008, the contribution amount begins to phase out for joint filers with incomes greater than $159,000 and $101,000 for single filers. The maximum contribution is $5,000 (or $6,000 if 50 or over).
