Roth IRA Income Limits for 2022

This article covers 2022 Roth IRA income limits for contributions. For 2021, see the article 2021 Roth rules.

As it turns out, 2022 is a big year for IRAs because of a current rule that allows for rollovers from traditional IRAs to the more desirable Roth IRAs. For this reason, it is important to know the difference between your Roth IRA contribution limits as opposed to traditional IRA limits. See the above link for slightly different rules that apply to 2022. Just as a reminder, the difference between traditional and Roth IRAs is whether you are contributing pre-tax dollars or after-tax dollars.

Income limits are important for the very reason that give Roth IRAs their advantage over traditional accounts. In both cases, the IRA is meant to help individuals save for retirement by conferring special tax benefits. In a traditional IRA, an individual under 50 can withdraw up to the contribution limit of six thousand dollars from his or her yearly income, in effect counting as a tax-deductible contribution. This means the individual is only taxed on the income leftover after funding the IRA. When it comes time to take distributions, the distributions will be taxed at ordinary income (which isn’t so great).

In contrast, the Roth is a much better choice for most investors. However, there are two types of Roth rules that restrict the usage of this great benefit: Roth IRA contribution limits and income limits.

The maximum Roth IRA contribution limit for 2022 is the same as for the traditional IRA. This means six thousand dollars for an individual under the age of fifty and seven thousand dollars for an individual over the age of 50. Take note, these are completely different than SEP limits. In addition, there is an income limit that starts to phase out an individual’s ability to contribute anything to this tax-free retirement vehicle. The government is only interested in helping taxpayers without a high income to provide for their own retirement by saving and investing in a Roth IRA. Instead of letting the rich take advantage of this, the government has set an income limit.

Roth IRA income limits for 2022

For single filers, once your modified AGI (adjusted gross income) has hit one hundred and twenty nine thousand dollars, the amount they can contribute to a Roth individual retirement account is slowly phased out until your income reaches one hundred and forty four thousand dollars.

For those who are married and filing jointly, the range is between two hundred and four thousand and two hundred fourteen thousand dollars. This means that if their yearly income is below either minimum threshold, they may contribute up to the full amount, but by the time they’ve hit the maximum threshold, they are no longer eligible to contribute any income that year.

If you are married and filing separately, the outlook is less than rosy. Your AGI must equal zero dollars in order to make the maximum Roth contribution, and the phase out range only goes to a ten thousand dollar ceiling.