What Are the Roth IRA Contribution Cut Offs?
Understand the IRS guidelines that determine your eligibility to contribute to a Roth IRA, based on factors like your income and the tax year calendar.
A Roth Individual Retirement Arrangement (IRA) is a retirement savings account where contributions are made with money that has already been taxed. This allows both investment growth and future withdrawals to be tax-free in retirement, provided certain conditions are met. The Internal Revenue Service (IRS) governs participation through a set of rules dictating who can contribute and how much. These regulations are based on specific deadlines and income thresholds that can change annually.
Annual Contribution Deadlines
The deadline for contributing to a Roth IRA for any given tax year is the same as the nation’s tax filing deadline, typically April 15th of the following year. For instance, an individual has until mid-April 2025 to make their full contribution for the 2024 tax year. This timing allows savers to assess their financial situation after the year has closed before committing funds.
Filing for an extension on your income taxes does not extend the deadline for IRA contributions. When making a contribution between January 1st and the April deadline, you must explicitly designate with your financial institution which tax year the contribution should be applied to—the year that just ended or the current year—to ensure proper crediting.
Income Eligibility Limits for Contributions
Eligibility to contribute to a Roth IRA is tied to your Modified Adjusted Gross Income (MAGI). MAGI is calculated from your Adjusted Gross Income (AGI), found on your tax return, with certain deductions added back. The IRS uses this figure to determine contribution eligibility, and these income thresholds are adjusted annually for inflation.
For the 2025 tax year, contribution ability is based on filing status. Single filers and Heads of Household with a MAGI under $150,000 can contribute the full amount. Their ability to contribute is phased out if their MAGI is between $150,000 and $165,000, and they are ineligible if their MAGI is $165,000 or more. This phase-out range means individuals can only make a reduced contribution.
A similar structure applies to married couples. Those who are Married Filing Jointly or are a Qualifying Widow(er) can make a full contribution with a MAGI below $236,000 for 2025. The phase-out range for a reduced contribution is between $236,000 and $246,000, with contributions disallowed for a MAGI of $246,000 or more. The rules are stricter for those Married Filing Separately; the phase-out range is $0 to $10,000, making most in this category ineligible.
Annual Contribution Amount Limits
The IRS sets a maximum dollar amount that an individual can contribute to all of their IRAs, including both Roth and Traditional, each year. For 2024 and 2025, the total contribution limit is $7,000 for individuals under age 50. This limit is the total combined amount for all IRA accounts in a single year.
People age 50 and over are permitted to make an additional “catch-up” contribution. For 2024 and 2025, this extra amount is $1,000, bringing their total potential contribution to $8,000 per year.
Your total contribution cannot exceed your earned income for the year. Earned income generally includes wages, salaries, tips, and self-employment income. For example, if a 25-year-old earns $4,000 from a part-time job, their maximum Roth IRA contribution for that year is limited to $4,000.
Correcting Excess Contributions
An excess contribution occurs when you contribute more to your Roth IRA than legally allowed. This can happen by exceeding the annual dollar limit or by contributing when your MAGI is above the eligibility threshold. These over-contributions must be addressed promptly to avoid penalties.
The primary way to fix an excess contribution is to withdraw the extra amount, along with any investment earnings it generated. This withdrawal must be completed by the tax filing deadline for the year the excess contribution was made, including any extensions. For example, an excess contribution for the 2024 tax year must be withdrawn by the tax deadline in 2025. The earnings portion of this withdrawal will be subject to income tax and potentially a 10% early withdrawal penalty.
Failing to correct an excess contribution results in a 6% excise tax. This tax is levied by the IRS on the excess amount for each year it remains in the account. The penalty is reported and paid using IRS Form 5329, “Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts,” and will be applied annually until the excess is withdrawn.