2023-2024 Roth IRA Qualifications: Are You Eligible to Open a Roth IRA?

Opening a Roth IRA is easy, but you must meet two specific eligibility requirements.

Roth IRA Qualifications:

• You must have earned income.
• Your earnings must fall within Roth IRA income limits.
• Open your IRA through an approved IRA custodian, like a bank or brokerage firm.
• Contribute to your Roth IRA before the contribution deadline.

Rules aside, Roth IRAs are an easy, flexible way to save for retirement. Here’s what you need to know to open one.

Earned Income Requirements for Roth IRA Contributions

You must have earned income to be eligible to open a Roth IRA.

Earned income includes any money you worked to receive. Family gifts and other income that doesn’t require work may not count as earned income. You must pay taxes on earned income, except when:

• You’re deployed to a tax-free combat zone
• You’re an overseas contractor who qualifies for the foreign earned income exclusion (FEIE)

While overseas contractors who exclude all their income from federal taxes aren’t eligible to open a Roth IRA, deployed military members can contribute to an IRA or other retirement account under The HEROES Act.

Income Limits for Roth IRA Contributions

To contribute to a Roth IRA, your earned income must fall within IRS Roth IRA income limits.

You can’t contribute to a Roth IRA if you earn above a certain threshold. However, you may be able to contribute to a traditional or nondeductible IRA now and do a Roth IRA conversion later. This is called a Backdoor Roth IRA or Roth IRA conversion.

What Is a Phase-Out Limit?

If your income falls within the IRS phase-out range, you can only contribute a portion of the maximum annual contribution limit.

Here’s a chart showing what these Roth IRA phase-out limits look like in 2024:

Filing Status	Modified AGI	Allowable Contribution
Married filing jointly or qualifying widow(er)	$230,000 or less	Up to the annual contribution limit
	More than $230,000 but less than $240,000	Partial amount
	$240,000 or more	No contribution
Married filing separately and you lived with your spouse at any time during the year	Less than $10,000	Reduced amount
	$10,000 or more	No contribution
Single, head of household or married filing separately and you did not live with your spouse at any time during the year	$146,000 or less	Up to the annual contribution limit
	More than $146,000 but less than $161,000	Partial contribution
	$161,000 or more	No contribution

Roth IRA Contribution Limits and Deadlines

IRS rules determine how much you can contribute to an IRA each year and when you can make contributions for each tax year.

Contribution Limits

If you’re under age 50, you can contribute $7,000 to your Roth IRA in 2024 (up from $6,500 in 2023). If you’re at least 50 years old, you can make a catch-up contribution of an additional $1,000, for a total of $8,000 in 2024 (up from $7,500 in 2023).

Contribution limits apply to Roth and Traditional IRAs. You can contribute to both, but the sum of your contributions cannot exceed the annual limit.

Here’s a table showing each year’s IRA contribution limit since 2002.

Tax Year	Contribution Limit Age 49 or Younger	Catch-Up Contribution Limit Age 50 or Older	Contribution Limit Age 50 or Older
2024	$7,000	$1,000	$8,000
2023	$6,500	$1,000	$7,500
2019 - 2022	$6,000	$1,000	$7,000
2013 - 2018	$5,500	$1,000	$6,500
2008 - 2012	$5,000	$1,000	$6,000
2006 - 2007	$4,000	$1,000	$5,000
2005	$4,000	$500	$4,500
2002 - 2004	$3,000	$500	$3,500

Contribution Deadlines

IRA contribution limits apply to each year. You can contribute to a Roth IRA as soon as the calendar year changes, but you must make all that year’s contributions by the tax filing deadline in April.

You cannot make additional contributions later to compensate for lost time in a previous year or extend the IRA contribution deadline if you need to file a tax extension.

Open Roth IRA at an Approved Institution

The IRS offers unique tax benefits for opening a Roth IRA, which must be correctly coded, managed, and tracked for tax reasons. So, you must open a Roth IRA at an IRS-approved financial institution.

Many brokerages, banks, credit unions, savings and loan associations, financial planners and FDIC-insured financial institutions qualify as IRS-approved financial institutions. Here are some top Roth IRA companies to consider.

Once you’ve chosen an IRS-approved institution, you can open an IRA within 30 minutes by submitting a few forms.

What to Do If You Don’t Qualify for a Roth IRA

If you don’t qualify for a Roth IRA, you may still be eligible to contribute to another IRA and convert it to a Roth IRA later.

For example, if you meet all the Roth IRA qualifications except income limits, you may be eligible to contribute to a nondeductible IRA.

A nondeductible IRA is a Traditional IRA that isn’t tax deductible. You can convert a nondeductible IRA into a Roth IRA later. However, several requirements apply. For example, you may have to account for your gains when you convert. If you’re planning to convert an IRA, consult a tax professional or fee-only investment advisor to avoid penalties and minimize taxes.

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