"Traditional" IRAs instead charge income taxes at the time funds are withdrawn from the account.This means that in a Roth IRA, you do not pay taxes on the interest earned within the account.This makes Roth IRAs a popular choice for retirement accounts.
Finding Your Contribution Limit Determining Roth IRA Eligibility Community Q&A An IRA is an Individual Retirement Arrangement, known more popularly as an Individual Retirement Account.A Roth IRA is a special type which allows account holders to pay taxes on income before it is used to make contributions to the account.To determine your Roth IRA income limits, follow the steps below.A Roth IRA can give you the perfect opportunity to optimize your retirement savings strategy.In contrast to the way regular IRAs work, Roth IRAs don't give you an up-front tax deduction, but they provide completely tax-But to prevent high-income taxpayers from using Roth IRAs to shelter huge amounts of retirement savings from tax for decades, Congress put limits on the ability for people to contribute to Roths.
Specifically, if you file as a single person and make more than 5,000 in adjusted gross income for 2012, you're not eligible to contribute to a Roth at all.
Keeping a bottle on the Roth IRAs have been around for a long time, but Roth IRAs are relatively new, having first become available just 15 years ago.
When they were introduced in 1997, they were intended to give an additional incentive for people to save for retirement.
The corresponding figure for joint filers is 3,000.
But if you make too much money, then the IRS may not allow you to take advantage of that opportunity.
These high-income taxpayers raise an obvious question: Is there any way around the Roth IRA income limits that the tax laws impose? I'll explain in detail later in this article, but first, let's take a look at the income limits themselves and what exactly they stop you from doing.