The rules for Roth IRAs are one of the least complicated sets of rules that the IRS has established in some time. To see if you qualify to participate this year, just check out the following guidelines.
First, you must have compensation. This means you must have earned wages, a salary, tips, fees for professional services, or bonuses. If married, the spouses’ combined compensation—even if one spouse’s compensation is $0—must be equal to or greater than the total contributions to the Roth IRA accounts.
Second, your income must be under the following limits:
- Married filing jointly
- $188,000 in 2013
- $183,000 in 2012
- Single, head of household, and married filing separately (filers who did not live with spouse) filers
- $127,000 in 2013
- $125,000 in 2012
- Married filing separately (filers who lived with their spouse at any time in 2012 or 2013).
- $10,000 for both 2013 and 2012.
Those are all the rules. It is that simple. Unlike traditional IRAs, there is no age limit.
The amount you can contribute is limited to the smaller of your compensation or $5,000. This contribution limit is raised to $6,000 if you are age 50 or older. These contribution limits begin to phase out as your income approaches the maximum income levels listed above. Contributions can be made for your spouse provided you meet the income requirements.
You have until April 15, 2013, to make a contribution for 2012. We also suggest making your contribution for 2013 as soon as possible.
If you have any questions concerning Roth or Traditional IRAs and their benefits for you, contact Henssler Financial at 770-429-9166 or experts@henssler.com.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
