Roth IRA Contribution Limits, MAGI Phases and 2024 Thresholds Explained

For 2024, income thresholds determine whether Americans can put money into a Roth IRA and how much. A Roth IRA contribution is never deductible, but many savers still prefer it because qualified withdrawals in retirement can be tax-free. The core rule holds steady: the total you add across all IRAs in a year—both traditional and Roth—cannot exceed the general IRA contribution limit.

According to analysis by VisaVerge.com, you must also designate the account as a Roth IRA when you open it, since Roth and traditional IRAs are treated differently for tax purposes. The United States rules below explain who can contribute to a Roth IRA, when the contribution limit is reduced, and how traditional IRA deductions work separately.

2024 MAGI ranges for Roth IRA contributions

A Roth IRA contribution may be limited by filing status and modified adjusted gross income (MAGI). If your MAGI rises above certain levels, your allowed Roth IRA contribution phases down and then reaches zero at a higher amount.

For 2024, the phase-out ranges are:

• Married filing jointly or qualifying surviving spouse:
  • MAGI under $230,000: contribute up to the Roth IRA limit
  • MAGI $230,000 to under $240,000: contribution is reduced
  • MAGI $240,000 or more: contribution is zero
• Married filing separately and lived with spouse at any time during the year:
  • MAGI under $10,000: contribution is reduced
  • MAGI $10,000 or more: contribution is zero
• Single, head of household, or married filing separately and did not live with spouse during the year:
  • MAGI under $146,000: contribute up to the Roth IRA limit
  • MAGI $146,000 to under $161,000: contribution is reduced
  • MAGI $161,000 or more: contribution is zero

If you split money between a traditional IRA and a Roth IRA, your total annual contributions still cannot exceed the general IRA contribution limit. That means the Roth IRA contribution limit and the traditional IRA contribution limit together equal the single annual cap for all IRAs in your name.

Excess contributions and corrections

Excess contributions occur when you add more than allowed. You can fix an excess if you act by the tax return due date, including extensions. To correct it, you must:

1. Withdraw the extra contribution, and
2. Withdraw any related earnings.

The IRS treats the withdrawn earnings as income for the year you made the excess contribution. Failing to remove the excess can expose you to penalties, so address it promptly.

For official guidance on Roth IRA rules, see the IRS page on Roth IRAs.

Traditional IRA deductions follow different income tests

A traditional IRA contribution may be tax-deductible, but the deduction can be reduced or eliminated if you or your spouse is covered by a retirement plan at work and your MAGI is above certain levels. These deduction rules do not change how much you can contribute; they only affect how much you can deduct.

If you are covered by a retirement plan at work in 2024

• Single or head of household:
  • MAGI $77,000 or less: full deduction
  • MAGI over $77,000 up to $87,000: partial deduction
  • MAGI $87,000 or more: no deduction
• Married filing jointly or qualifying surviving spouse:
  • MAGI $123,000 or less: full deduction
  • MAGI over $123,000 up to $143,000: partial deduction
  • MAGI $143,000 or more: no deduction
• Married filing separately:
  • MAGI under $10,000: partial deduction
  • MAGI $10,000 or more: no deduction

If you are NOT covered by a plan at work

Your deduction is limited only if your spouse is covered by a plan:

• Single, head of household, or qualifying surviving spouse:
  • MAGI any amount: full deduction
• Married filing jointly or separately and spouse is not covered at work:
  • MAGI any amount: full deduction
• Married filing jointly and spouse is covered at work:
  • MAGI $230,000 or less: full deduction
  • MAGI over $230,000 up to $240,000: partial deduction
  • MAGI $240,000 or more: no deduction
• Married filing separately with a spouse covered at work:
  • MAGI under $10,000: partial deduction
  • MAGI $10,000 or more: no deduction

Calculating a partial deduction

To check if your deduction is subject to a phase-out, compare your MAGI to the “base amounts.”

• If MAGI is below the lower base, you get a full deduction.
• If MAGI is above the upper base, you get no deduction.
• If MAGI falls between the bases, calculate a partial deduction by subtracting MAGI from the upper base amount and multiplying by a percentage tied to filing status:
  • Married filing jointly or qualifying surviving spouse (covered by employer plan):
  • Total IRA deduction is 27.5% (or 32.5% if age 50 or older) of the difference between MAGI and the upper base amount.
  • All others:
  • Total IRA deduction is 55% (or 65% if age 50 or older) of the difference between MAGI and the upper base amount.

Examples

• Tony: age 29, single, covered by a retirement plan at work in 20X6.
  • Salary: $150,000, MAGI: $195,000.
  • Tony contributes $6,000 to a traditional IRA for 20X6.
  • Because he is covered by a plan and his MAGI is above the limit, he cannot deduct the $6,000.
  • He must designate this as a nondeductible contribution by reporting it on Form 8606.
  • If Tony were not covered by a plan at work, he could take a full deduction regardless of this MAGI.
• Matt: covered by a retirement plan at work.
  • He contributes $5,000 to his traditional IRA and cannot deduct it because his MAGI exceeds the limit.
  • He must designate it as a nondeductible contribution by filing Form 8606.

Nondeductible traditional IRA contributions

• Nondeductible contributions are allowed up to the general IRA contribution limit (or spousal IRA limit, if applicable).
• A nondeductible contribution increases your IRA basis and is not taxed again when withdrawn.
• To designate any nondeductible amount, you must file Form 8606—even if you’re not required to file a tax return for the year.
• If you don’t report nondeductible contributions, the IRS will treat all your traditional IRA contributions as deductible, and future distributions will be taxed.

Practical takeaways for 2024 filers

• A Roth IRA contribution is always nondeductible. Your ability to contribute depends on MAGI and filing status, and the contribution limit may shrink or drop to zero within the phase-out range.
• The total you add to all IRAs cannot exceed the general IRA contribution limit.
• If you exceed the allowed Roth IRA contribution limit, withdraw the extra and its earnings by the tax return due date (including extensions). The earnings count as income in the year of the excess.
• Traditional IRA deduction rules are separate from Roth IRA rules. Coverage by a work plan and MAGI determine whether your deduction is full, partial, or zero.

VisaVerge.com reports that careful labeling of IRA contributions and timely filing of required forms help taxpayers avoid unexpected taxes and penalties while staying within each contribution limit.