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What Are the Roth IRA Rules for Married Couples?

Money Girl explains what married couples need to know about contributing to a Roth IRA. 

By
Laura Adams, MBA
May 14, 2014
Episode #356

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What Are the Roth IRA Rules for Married Couples?A Money Girl reader named Monica asks:

"I’m getting married later this year and we plan on filing taxes jointly. I just found out that due to our combined income, I won’t be eligible for my Roth IRA this year. What should I do if I’ve already made contributions to the account?"

Congratulations to Monica for her upcoming wedding! 

In this episode we’ll cover what married couples need to know about contributing to a Roth IRA. You’ll find out what to do if getting hitched causes a separation between you and your Roth IRA.

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Roth IRA Rules for Married Couples

A Roth IRA is an individual retirement plan that’s similar to a traditional IRA in many ways, but has some key differences that married couples need to know.

The major benefits of a Roth are that distributions can generally be made tax free, you don’t have to take withdrawals in retirement, and you can leave funds in the account as long as you live. These advantages don’t change when you get married.

However, whether you’re eligible to make contributions in the first place, and the amounts you can put in each year, hinge on your income and tax filing status. You’d think that the contribution limit for a married couple would be double what it is for a single—but it’s actually much less. 

Getting married means you can no longer file taxes as a single person. Married couples must choose to file taxes either as married filing jointly or married filing separately. If you’re married on the last day of the year, the IRS consider you to have been married for the entire year for tax purposes. 

Unlike a traditional IRA, you become ineligible to make contributions to a Roth IRA when you’re considered a high earner.

How Much Can You Contribute to a Roth IRA?

No matter your tax filing status, the maximum amount you can contribute to either a traditional or a Roth IRA (or a combination of both) for 2014 is $5,500. You’re eligible for an additional “catch up” contribution of $1,000 if you’re age 50 or older, for a total of $6,500.

Unlike a traditional IRA, you become ineligible to make contributions to a Roth IRA when you’re considered a high earner. In other words, when you have taxable income over a certain amount, you’re simply not allowed to contribute to your Roth for that tax year.

What Is the Roth IRA Contribution Limit?

Here are the Roth IRA limits for adjusted gross income, depending on your tax filing status, for 2014:

  • Single: $129,000
  • Head of household: $129,000
  • Qualifying widow(er): $191,000
  • Married filing jointly: $191,000
  • Married filing separately and you did not live with your spouse: $129,000
  • Married filing separately and you did live with your spouse at any time during the year: $10,000

Note that the income thresholds for married couples applies to their combined income. For instance, when a married couple files jointly and has household adjusted gross income over $191,000, both spouses are ineligble to contribute to a Roth IRA.

So exceeding the allowable income limit means that both Monica and her new spouse will be ineligible to contribute to a Roth IRA.

What Is the Roth IRA Contribution Phase Out Limit?

But even if you earn less than the Roth IRA contribution limits, there are still restrictions on how much you can contribute when your income falls into these phase-out zones, for 2014:

  • Single: between $114,000 and $129,000
  • Head of household: between $114,000 and $129,000
  • Qualifying widow(er): between $181,000 and $191,000
  • Married filing jointly: between $181,000 and $191,000
  • Married filing separately and you did not live with your spouse: between $114,000 and $129,000
  • Married filing separately and you did live with your spouse at any time during the year: between $0 and $10,000

Having income in a phase-out zone means you can still put money in a Roth IRA, but you can’t contribute the maximum amounts of $5,500 or $6,500 for 2014.

To learn more about how to calculate your eligible contribution amount see IRS Publication 590, Individual Retirement Arrangements (IRAs) or consult with your accountant or retirement plan custodian.

Also see: What Is the Marriage Tax Penalty?

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