What Are the Roth IRA Phase Out Income Limits?

A Roth Individual Retirement Arrangement (IRA) is a retirement savings account where you contribute money that has already been taxed. Its benefit is that your investments can grow and be withdrawn in retirement completely tax-free. However, not everyone is eligible to contribute. The Internal Revenue Service (IRS) establishes income limitations that determine whether you can contribute the full amount, a reduced amount, or nothing at all. These income thresholds, known as phase-out ranges, are a central factor in eligibility.

Roth IRA Income and Contribution Limits

For 2025, the maximum amount you can contribute is $7,000 if you are under age 50. Individuals age 50 and over can make an additional “catch-up” contribution of $1,000, for a total of $8,000. Your ability to contribute this amount depends on your Modified Adjusted Gross Income (MAGI).

Each tax filing status has a unique income phase-out range for 2025. For single or head of household filers, a full contribution is allowed with a MAGI below $150,000. The phase-out range is between $150,000 and $165,000, and eligibility is eliminated at a MAGI of $165,000 or more. For those married and filing jointly, a full contribution is allowed for a MAGI below $236,000. The phase-out range for this group is between $236,000 and $246,000, with eligibility cut off at a MAGI of $246,000 or more.

The rules are stricter for those who are married and file separate tax returns, if they lived with their spouse at any point during the year. For this group, no full contribution is permitted. Instead, a reduced contribution is allowed for a MAGI between $0 and $10,000. The ability to contribute is eliminated at a MAGI of $10,000 or more.

Calculating Your Modified Adjusted Gross Income (MAGI)

Roth IRA eligibility is based on your Modified Adjusted Gross Income (MAGI), not your total salary or Adjusted Gross Income (AGI). MAGI is calculated by taking your AGI and adding back specific tax deductions. For many taxpayers, MAGI is very similar to AGI, but performing the calculation is required to confirm eligibility.

To determine your MAGI, start with your AGI from line 11 of your Form 1040. You must then add back specific deductions. The most common adjustment is for contributions to a traditional IRA, which prevents individuals from lowering their income with a traditional IRA deduction to qualify for a Roth IRA. Other adjustments include:

• Student loan interest deduction
• Tuition and fees deduction
• Excluded foreign earned income and housing expenses

The sum of your AGI and these add-backs is your MAGI. The IRS provides a worksheet for this calculation in Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs).

How to Calculate Your Reduced Contribution

If your MAGI falls within the phase-out range for your filing status, you cannot make the maximum contribution, but you may still be able to contribute a reduced amount. The calculation for this reduced contribution follows a specific formula provided by the IRS to determine how much you are permitted to contribute.

First, subtract the lower limit of the phase-out range from your MAGI. Then, divide that result by the size of the phase-out range ($15,000 for single/head of household, $10,000 for married filing jointly). Multiply the maximum annual contribution by this result to find your reduction amount. Your allowed contribution is the maximum limit minus this reduction amount.

For example, a single filer under 50 with a $155,000 MAGI is $5,000 into the $15,000 phase-out range. Dividing $5,000 by $15,000 gives a reduction factor of 0.333. Multiplying the $7,000 maximum contribution by 0.333 results in a $2,331 reduction, so the allowed contribution is $4,669. If a calculation results in an allowed contribution between $0 and $200, you are permitted to contribute $200.

Options for Excess Contributions

If your final MAGI is higher than anticipated and you contribute more than allowed, you have made an excess contribution. To avoid penalties, you must correct this error before the tax filing deadline, which is April 15 of the following year.

One option is to withdraw the excess contribution and any income it earned before the tax deadline. The withdrawn earnings are considered taxable income but are not subject to the 10% early withdrawal penalty, even if you are under age 59 ½. This action avoids the 6% penalty for over-contributing.

Another solution is to recharacterize the contribution. This involves instructing your IRA custodian to move the excess amount and its earnings to a traditional IRA, effectively treating it as if it were made there originally. This action must also be completed by the tax deadline to avoid penalties. If you fail to correct an excess contribution, you will face a 6% excise tax on the amount for each year it remains in the account.