Roth IRA Contribution and Income Limits 2023-2024 - NerdWallet (2024)

A Roth IRA is a type of individual retirement account that allows for tax-free withdrawals in retirement. Contributions are made after-tax, meaning that you don’t get an upfront tax break. There are guidelines on how much you can contribute each year. Those limits depend on your income, your tax filing status, and other contributions you may have made to other IRA accounts.

Roth IRA contribution limits 2023

For 2023, the IRS allows an annual maximum IRA contribution limit of $6,500 a year if you're under 50, or $7,500 if you're 50 or older. That total is for all IRA accounts you might have. If you have, for example, a Roth and a traditional IRA, you can put some money in one, and some in the other, but the combined contribution cannot equal more than $6,500 (or $7,500 for those 50-plus).

Roth IRA income limits 2023

If your MAGI is less than $138,000 in 2023 and you're a single filer, you can contribute the full amount. If your MAGI is more than $138,000, but less than $153,000, you can contribute a reduced amount to a Roth.

To see who is eligible to contribute to a Roth IRA, check out the table below. (These Roth IRA income limits are based on modified adjusted gross income, which is your adjusted gross income with some deductions added back in.)

Roth IRA contribution limits 2024

For the 2024 tax year, the Roth IRA contribution limits rise to $7,000 for those under the age of 50. Those who are 50 or older can contribute up to $8,000. The cap applies to contributions made across all IRA accounts held. This means, for example, that you can spread your yearly contribution limit between a Roth and a traditional IRA, but your total contributions can't exceed the yearly limit.

Roth IRA income limits 2024

If your MAGI is less than $146,000 in 2024 and you're a single filer, you can contribute the full amount. If your MAGI is more than $146,000, but less than $161,000, you can contribute a reduced amount to a Roth.

To see who is eligible to contribute to a Roth IRA, check out the table below. (These Roth IRA income limits are based on modified adjusted gross income, which is your adjusted gross income with some deductions added back in.)

Can I contribute to a Roth IRA if my income is too high?

If your income is too high, you won't be able to contribute to a Roth IRA directly, but you do have an option to get around the Roth IRA income limit: a backdoor Roth IRA. This involves putting money in a traditional IRA and then converting the account to a Roth IRA.

If you have a 401(k), you could also consider a mega backdoor Roth, though this process may be more involved and incur potential tax bills. Working with a tax professional who’s familiar with your financial situation could be helpful.

Calculate your reduced Roth contribution

Contributing to a Roth (if you’re eligible) can be a great idea, even if your contribution is reduced because of your income.

This is because your money will still be contributed after taxes and you'll get to take distributions from a Roth IRA tax-free in retirement. Assuming you follow the Roth IRA withdrawal rules, you won’t pay taxes on any investment growth.

You’ll also gain some valuable tax diversification in retirement: Because Roth IRA distributions aren’t included in your income in retirement, pulling money from that pot in addition to a traditional IRA or 401(k) could keep you in a lower tax bracket, potentially reducing the taxes on your Social Security benefits and lowering Medicare premiums that increase at higher income levels. (Read more about the pros and cons of Roth IRAs.)

Other Roth IRA rules

The fine print on Roth IRA contribution limits is that you can’t contribute more than your taxable compensation for the year. If, say, your earned income is $3,000, your Roth IRA contribution limit is also $3,000 for that year. If you don’t have any earned income during the year, you can’t contribute. (The exception is the spousal IRA, which allows a nonworking spouse to contribute to an IRA based on the taxable compensation of the working spouse.)

Contributing too much to a Roth

Contributions in excess of the annual Roth IRA limits can trigger a penalty from the IRS that could easily wipe out any investment income.

But here’s the good news: You’re allowed to backtrack. If you realize your mistake prior to filing your tax return, withdraw the excess contributions and the earnings you received on them. If you’ve already filed, you can remove the excess and earnings within six months, and file an amended tax return. In both cases, you’ll pay taxes on the earnings but no penalty.

The other option is to reduce the following year’s contribution by the excess amount, but you’ll pay a 6% penalty on the excess that was contributed, for every year it remains in the account.

The lesson: Keep track of your Roth IRA contributions, especially if you use more than one account. If you have questions about removing excess funds, it may make sense to work with a tax advisor.