Roth IRA Contribution Limits 2011

Roth IRA Contribution Limits 2011

The Roth IRA contribution limits 2011 establish the maximum amount you can invest for retirement via an IRA. The regular IRA and Roth IRA Contribution Limits 2011, plus the 2011 standard IRA deductibility restrictions and the 2011 Roth IRA income limits, are all critical considerations.

( Notice : If you are looking for the IRA limits for 2010 related to the April 15, 2011 tax filing deadline, review IRA contribution limits 2010.  If you are looking for Roth IRA Contribution Limits 2011, keep reading.)

Roth IRA Contribution Limits 2011

The Roth IRA Contribution Limits 2011 were unchanged from 2010. Since 2008, the maximum you may contribute to a traditional IRA each year is $5,000. However, if you will be fifty or older by the end of the year, you may contribute an extra $1,000, for a $6,000 total IRA contribution limit. Remember that you and/or your spouse are required to have earned income at least as much as the amount you contribute.

These limits apply to both traditional and Roth IRAs. Even though you may be eligible to contribute to both plans, your combined contribution to both accounts may not be greater than your above limit ($5,000 or $6,000).

Roth IRA Contribution Limits 2011

Deductible Roth IRA Contribution Limits 2011

Although there is no maximum income restriction for contributing to a regular IRA, there are income caps to deducting standard IRA contributions, which will vary based on marital status, income, and workplace retirement (for example, 401(k), 403(b) plan eligibility).

Roth IRA Contribution Limits 2011:  Income Limits

Unlike standard IRA contributions, not every worker can contribute to a Roth IRA. Based on one’s marital status and income, some high-income earners are not eligible to contribute to Roth IRAs. But, since these plans are so advantageous to your preparations for retirement, be sure to understand the restrictions every year before deciding that you don’t qualify.

Roth Conversion Contribution Limits 2011:  Income Limitations

Even if you earn too much income for a direct Roth IRA contribution, you might be able to use a Roth IRA by way of the backdoor. Roth IRA Contribution Limits 2011 allow the ability to convert a standard IRA to a Roth IRA became available to all taxpayers regardless of income on the 1st of January, 2010. Previously, a conversion was only accessible to people who had a modified adjusted gross income of $100,000 or less.

Per the IRS:

Roth IRA Contribution Limits 2011

Roth IRA Contribution Limits 2011 Combined with Traditional IRA Limits

If you are under 50 years of age at the end of 2011: The maximum contribution that can be made to a traditional or Roth IRA is the smaller of $5,000 or the amount of your taxable compensation for 2011. This limit can be split between a traditional IRA and a Roth IRA but the combined limit is $5,000.The maximum deductible contribution to a traditional IRA and the maximum contribution to a Roth IRA may be reduced depending on your modified adjusted gross income.

If you are 50 years of age or older before the end of 2011: The maximum contribution that can be made to a traditional or Roth IRA is the smaller of $6,000 or the amount of your taxable compensation for 2011. This limit can be split between a traditional IRA and a Roth IRA but the combined limit is $6,000. The maximum deductible contribution to a traditional IRA and the maximum contribution to a Roth IRA may be reduced depending on your modified adjusted gross income.

See Publication 590, Individual Retirement Arrangements (IRAs) for additional information.

For more information, please visit the Roth IRA Contribution Limits 2011 info page and compare IRA Contribution Limits 2010 and 2011.

Roth IRA Contribution Limits 2011 are changing slightly for 2012.  Stay tuned for the update…