What Are the Roth IRA Contribution Limits for 2024?

A Roth Individual Retirement Arrangement, or Roth IRA, is a retirement savings account that allows for tax-free withdrawals in retirement. Contributions are made with money that has already been taxed, a primary distinction from traditional IRAs. Understanding the contribution rules is a yearly task, as limits and income thresholds change. For the 2024 tax year, the Internal Revenue Service (IRS) has outlined specific parameters that dictate who can contribute and how much.

2024 Roth IRA Contribution Limits

For the 2024 tax year, the maximum amount an individual can contribute to all their IRAs, including both Roth and traditional, is $7,000. This limit is a cumulative cap that applies to the total contributions made across all of an individual’s IRA accounts, not to each account separately. The IRS also provides a provision for those nearing retirement to increase their savings. Individuals age 50 or over are permitted to make an additional “catch-up” contribution of $1,000, bringing their total potential contribution to $8,000.

Income Restrictions on Contributions

The ability to contribute to a Roth IRA is tied 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, such as student loan interest.

For 2024, these income limitations are based on your tax filing status. For those filing as Single, Head of Household, or Married Filing Separately (if you did not live with your spouse), the phase-out range is $146,000 to $161,000. If your MAGI is below $146,000, you can make the full contribution, while a MAGI of $161,000 or more means you cannot contribute. For those who are Married Filing Jointly or a Qualifying Widow(er), the phase-out range is $230,000 to $240,000. A stricter range of $0 to $10,000 applies to individuals who are Married Filing Separately and lived with their spouse.

If your income falls within a phase-out range, your contribution limit is reduced. To calculate the reduced amount, first determine how far into the range your MAGI falls. For example, a single filer with a $150,000 MAGI is $4,000 into the $15,000 phase-out range ($161,000 – $146,000). Next, divide this amount by the total size of the range ($4,000 / $15,000) and multiply that result by your maximum contribution limit. This product is the amount you must reduce your contribution by, which you then subtract from the maximum limit.

Rules for Making Contributions

Eligible Compensation

To contribute to a Roth IRA, you must have taxable compensation, which includes wages, salaries, commissions, or self-employment income. Your total contribution to all your IRAs for the year cannot exceed your total taxable compensation. For instance, if you earned $4,000 in 2024, your maximum IRA contribution would be $4,000. Income from sources like interest, dividends, and rental property is not considered compensation for this purpose.

Contribution Deadline

The deadline for making Roth IRA contributions for the 2024 tax year is April 15, 2025, the same as the tax filing deadline. Filing for a tax extension does not extend the deadline for making IRA contributions. When you make a contribution between January 1 and the tax filing deadline, you must specify to your IRA custodian whether it is for the current year or the prior year.

Spousal IRA Rules

A rule for married couples filing a joint tax return allows a spouse with little or no taxable compensation to contribute to their own IRA, known as a spousal IRA. This is permitted as long as the working spouse has sufficient taxable compensation to cover the contributions for both individuals. For example, if one spouse earns $80,000 and the other has no earnings, they could each contribute up to the maximum limit to their respective IRAs. This is provided their combined contributions do not exceed the working spouse’s total compensation.

Correcting Excess Contributions

An excess contribution occurs when you contribute more to your Roth IRA than legally allowed, either by exceeding the contribution limit or by contributing when your income is too high. The IRS imposes a 6% excise tax on the excess amount for each year it remains in the account. This penalty is reported and paid using Form 5329.

To fix this error and avoid the recurring penalty, you can withdraw the excess contribution and any earnings on it before your tax return due date, including extensions. The withdrawn earnings are considered taxable income for the year the contribution was made. You must coordinate with your IRA custodian to process this corrective distribution.

Another option is to apply the excess contribution to a subsequent year’s limit. For example, a $1,000 excess from 2024 could be applied to your 2025 limit if you reduce your 2025 cash contribution by $1,000. However, this method still requires you to pay the 6% penalty for the year the excess remained in the account.