Taxpayers confused about whether they can contribute to a Roth IRA should consider guidelines based on the following categories:

Income Limits to Contribute to a Roth IRA: You must have compensation (e.g., wages, salary, tips, professional fees, bonuses). These limits vary depending on your filing and marital statuses. Generally, you can contribute to a Roth IRA if you have taxable compensation and your modified AGI for 2008 is less than:

  • $169,000 ($176,000 for 2009) for married filing jointly or qualifying widow(er),

  • $10,000 for married filing separately and you lived with your spouse at any time during the year (for both 2008 and 2009), and

  • $116,000 ($120,000 for 2009) for single, head of household, or married filing separately and you did not live with your spouse at any time during the year.

Age: There is no age limitation for Roth IRA contributions.

Contribution Limits in General: If your only IRA is a Roth IRA, the maximum 2008 contribution limit is the lesser of your taxable compensation or $5,000 ($6,000 if 50 or older). The same contribution amounts will hold in 2009. The maximum contribution limit phases out depending on your modified adjusted gross income.

Spousal Roth IRA: You can make contributions to a Roth IRA for your spouse provided you meet the income requirements.

Time Contributions to a Roth IRA can be made at any time during the year or by the due date of your return for that year (not including extensions).

Roth IRA contributions are not tax deductible and are not reported on your tax return. On the other hand, you do not include in your gross income, and therefore are not taxed on, any qualified distributions or distributions that are a return of your regular Roth IRA contributions or that are rolled over into another Roth IRA.