Roth IRA contribution limit calculator is devised to help you estimate the amount of contribution possible in your case for the tax year 2020 and 2019. This is so because the law has put restrictions on the deposit under the Roth IRA scheme. The tax can’t be more than 6% of the combined value of all your IRAs as of the end of the tax year.
Roth IRA contribution limit calculator
Just by answering a few questions, the Roth IRA calculator will tell you how much contribution possible or no savings is possible.
Roth IRA Contribution Limit 2020 & 2019
There are many restriction about type of income that can be used for opening an IRA account . But for Roth IRA, there is an additional contribution limit that is based on how much income you have in the year of deposit. The 2020 limit for contributions to Roth IRA is $6,000, or $7,000 if you’re aged 50 or older. The same limit was for the year 2019.
Filing Status 2019 Modified AGI 2020 Modified AGI Contribution Limit Married filing jointly or qualifying widow(er) Less than $193,000 Less than $196,000 $6,000 ($7,000 if you’re age 50 or older) $193,000 to $202,999 $196,000 to $203,999 Reduced $203,000 or more $206,000 or more Not eligible Single, head of household, or married filing separately (and you didn’t
live with your spouse at any time during the year)
Less than $122,000 $124,000 $6,000 ($7,000 if you’re age 50 or older) $122,000 to $136,999 $124,000 to $138,000 Reduced $137,000 or more $139,000 or more Not eligible Married filing separately (if you lived with your spouse at any time during
Less than $10,000 Less than $10,000 Reduced $10,000 or more $10,000 or more Not eligible
Why knowing Roth IRA contribution limit important?
The reason is simple. Any amount of deposit that is more than contribution limit is taxable .IRS taxes excess contributions at 6% per year if the excess amounts remain in the IRA. So, it is better to withdraw the excess contributions from your IRA by the due date of your individual income tax return (including extensions); and also take out any income earned on the excess contribution. This will save you from penalty of 6% on excess contribution.