What Are the Roth IRA Contribution and Income Limits?

A Roth Individual Retirement Arrangement (IRA) is a retirement savings account where your money grows tax-free. You contribute post-tax money, and in exchange, your future qualified withdrawals are not taxed. The regulations for the 2025 tax year involve specific limits based on your age and income, which determine your eligibility and maximum contribution.

2025 Annual Contribution Limits

For the 2025 tax year, the maximum amount an individual can contribute to a Roth IRA is $7,000. This limit applies to individuals who are under the age of 50. The Internal Revenue Service (IRS) allows for a “catch-up” contribution for those nearing retirement to save more. Savers who are age 50 or over during 2025 can contribute an additional $1,000, bringing their total potential contribution to $8,000.

These limits apply to the total contributions made across all of your IRAs. If you have both a Traditional and a Roth IRA, your combined contributions cannot exceed the annual limit based on your age. The deadline to make a 2025 contribution is the tax filing deadline, typically April 15, 2026. This deadline does not include filing extensions.

Income-Based Contribution Rules

Your ability to contribute to a Roth IRA is also linked to your Modified Adjusted Gross Income (MAGI). MAGI is calculated by taking your Adjusted Gross Income (AGI) from your tax return and adding back certain deductions. For most taxpayers, MAGI is very close to their AGI. The IRS sets MAGI phase-out ranges that determine if you can contribute the full amount, a reduced amount, or nothing.

For 2025, a single filer or head of household with a MAGI below $150,000 can contribute the maximum. If their MAGI is between $150,000 and $165,000, they can make a partial contribution. A MAGI of $165,000 or more makes them ineligible to contribute.

For married couples filing jointly, a MAGI below $236,000 allows for full contributions. The phase-out range for partial contributions is between $236,000 and $246,000. A couple with a MAGI of $246,000 or more is ineligible. A separate phase-out range of $0 to $10,000 applies to those who are married and file separately.

Calculating Your Allowable Contribution

If your MAGI falls within the phase-out ranges, you must calculate a reduced contribution amount. The IRS provides a worksheet in Publication 590-A to guide this calculation. The formula first determines a reduction ratio.

The formula begins by subtracting the lower limit of the phase-out range from your MAGI. You then divide this result by the size of the phase-out range ($15,000 for single filers and $10,000 for married filers). This gives you a reduction ratio, which you multiply by your maximum contribution limit. The final step is to subtract this reduction amount from your maximum contribution limit to find your allowed contribution.

For example, a single filer, age 40, with a MAGI of $153,000 is $3,000 into the $15,000 phase-out range. The calculation is ($3,000 / $15,000) $7,000 = $1,400. Their maximum allowable contribution is $7,000 – $1,400 = $5,600 for the year.

Understanding Excess Contributions

An excess contribution occurs when you deposit more money into your Roth IRA than legally allowed for a tax year. One way this happens is by contributing more than the annual dollar limit, such as depositing $7,500 when the limit is $7,000. Another cause is making a contribution when your MAGI exceeds the permissible limits.

For instance, if a single filer with a MAGI of $170,000 contributes any amount, the entire contribution is considered excess. This can occur if you contribute early in the year before your final income is known. The consequence for failing to correct an excess contribution is a 6% excise tax from the IRS, applied for each year the excess amount remains in the account. This penalty is reported on IRS Form 5329.

How to Correct an Excess Contribution

The most common method to correct an excess contribution is to withdraw the excess amount, along with any net income it generated. This must be done before your tax return due date, including extensions, for the year of the contribution. You must contact the financial institution holding your IRA to request a “return of excess contributions.” The institution will calculate the earnings, and both the excess amount and the earnings must be withdrawn; the earnings portion is subject to income tax and a potential 10% penalty.

An alternative is to apply the excess contribution to a subsequent year’s limit, if you are eligible and have not already contributed the maximum for that year. Another option, if the deadline has passed, is to withdraw only the excess amount. You would still owe the 6% penalty for the year the excess was made but would prevent it from being assessed in future years.