A Roth IRA lets you accumulate earnings on a tax-deferred basis and withdraw earnings tax free for qualified distributions. Unlike a Traditional IRA, contributions to a Roth IRA are not deductible on your federal income tax return. However, since you have already paid taxes on the money you've contributed to the account, contribution dollars can be withdrawn at any time without tax consequences1.
You must have earned income (compensation) in order to contribute to a Roth IRA. The annual amount you can contribute to a Roth IRA is solely dependent on your adjusted gross income as determined on your federal income tax return.
The following table should help you determine if you're eligible to contribute to a Roth IRA:
Modified Adjusted Gross Income Limits
|Tax Filing Status||Tax Year||Full Contribution||Partial Contribution||Not Eligible|
|Single/Head of Household||2018||Less than $120,000||$120,000 to less than $135,000||$135,000 and above|
|Married Filing Jointly||2018||Less than $189,000||$189,000 to less than $199,000||$199,000 and above|
|Married filling Separately||2018||N/A||$0 to less than $10,000||$10,000 and above|
|Single/Head of Household||2017||Less than $118,000||$118,000 to less than $133,000||$133,000 and above|
|Married Filing Jointly||2017||Less than $186,000||$186,000 to less than $196,000||$196,000 and above|
|Married Filing Separately||2017||N/A||$0 to less than $10,000||$10,000 and above|
1 Earnings may be taxed at your tax rate, and a 10% tax penalty for an early withdrawal of these earnings may apply.
For educational purposes only.
Neither State Farm® nor its agents provide tax or legal advice.
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