Roth IRA Income Limits for 2007
Last fall I wrote about the Roth IRA income limits for 2006 contributions. While this information is still germane (you have until taxes are due to contribute for last year), 2007 is already upon us, and many of us are looking ahead. So… I thought I’d put something together on the 2007 Roth IRA contribution limits. Here goes:
Married Filing Jointly: Roth IRA contributions phase out between $156k-$166k
Single or Head of Household: Roth IRA contributions phase out between $99k-$114k
Married Filing Separately, Living Apart: Roth IRA contributions phase out between $99k-$114k
Married Filing Separately, Other: Roth IRA contributions phase out between $0-$10k
(Note that these numbers all refer to modified adjusted gross income, or MAGI)
As I’ve hinted at elsewhere, there’s a good chance that we’ll exceed the income limit for Roth IRA contributions this year. Thus, we’ve been looking into other options for retirement savings in 2007.
Disclaimer: Discover is a paid advertiser of this site.
Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.
Modified on January 2nd, 2008 - 12 Comments
Filed under: Saving & Investing, Taxes
About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!
Related articles...
» Roth IRA Income Limits for 2012» 2007 IRA Contribution Limits
» IRA Changes for 2008
» Roth IRA Conversion in a Down Market
» Help a Reader: Roth IRA Income Limits and Marriage
» Roth IRA Conversion Limits Going Away
» Ratcheting Up Our 403(b) Contributions
» Contribute and Convert: Funding Our Roth IRAs Through the Backdoor
Was this article useful? Please sign up to receive our content via e-mail:
12 Responses to “Roth IRA Income Limits for 2007”
Leave a Reply
Top Cards by Category
Earn 100 Reward Dollars after you make $1,000 in purchases in the first three months of Cardmembership.
Earn 25K Membership Rewards(R) points after you spend $2,000 during your first three months of Card membership.
Consumer friendly credit card with a great low rate of 7.25% and save on interest charges. No balance transfer fees and no annual fee.
The new Discover it card is out to change the way people think about credit cards. No annual fee. No overlimit fee. No foreign transaction fee & no pay-by-phone fee. No late fee on your first late payment. And Discover won't increase your APR for paying late.*
The new Discover it card is out to change the way people think about credit cards. No annual fee. No overlimit fee. No foreign transaction fee & no pay-by-phone fee. No late fee on your first late payment. And Discover won't increase your APR for paying late.*
Consumer friendly credit card with a great low rate of 7.25% and save on interest charges. No balance transfer fees and no annual fee.
Limited Time Offer: Get 25,000 Membership Rewards(R) points after you spend $5,000 in the first three months of Card membership. Enroll and select a qualifying airline to receive up to $200 annually in statement credits for incidental fees, such as checked bags and in-flight refreshments, charged by the airline.
The new Discover it card is out to change the way people think about credit cards. No annual fee. No overlimit fee. No foreign transaction fee & no pay-by-phone fee. No late fee on your first late payment. And Discover won't increase your APR for paying late.*
- How to Become a Millionaire
- How to Get Out of Debt
- The Best Dollars I've Ever Spent
- How Our Estate Plan is Structured
- How We Paid Our Mortgage In Less than 10 Years
- Money Making Ideas
- How to Manage Your Asset Allocation with Multiple Accounts
- Consumption Smoothing - Save While the Saving's Good
- How to Save on Groceries
- How Much Life Insurance Do You Need?
- Eleven Great Books About Money
- Dave Ramsey is Bad at Math
- Dish Network Customer Service SUCKS
- $8,000 Homebuyer Tax Credit
- Pay Off Mortgage Early or Invest?
- How to Claim the First-Time Homebuyer Tax Credit
- Termite Control: Sentricon vs. Termidor
- How Much Should You Pay a Babysitter?
- Ethanol Blended Gas = Lower Mileage?
- Reduced Credit Limits? Share Your Experience
- $15,000 Homebuyer Tax Credit
- Will Mac OS X Lion Kill Quicken 2007?
- Federal Income Tax Rates Went Down but Your Federal Tax Withholding Increased. Here's Why...
How to save money on insurance
- Overdraft fees soared to $32 billion in 2012
- How do you combat prom inflation?
- How should you choose a bank? Look in the mirror.
- The cost of clean water
- College debt 101
- Is it possible to live debt free?
- How to prepare for a home appraisal
- Home prices are up: good news or bad?
- A bit of foolishness
- Passive solar homes: the basics
April 3rd, 2007 at 11:11 am
Are those numbers AGI?
April 3rd, 2007 at 3:09 pm
I live in Ohio and we get whammied because we must file our Ohio state taxes the same way we file federally. For us, our tax bill is lower when we file separately, but that puts our contribution limit for a Roth IRA at $0-$10k. So in order to qualify for a Roth, we file married and pay the extra tax. We figure the tax break on all those earnings will be worth it during retirement.
I think Ohio is the only state that does this.
April 5th, 2007 at 10:40 pm
Hey Nickel,
Have you ever looked offshore for tax benefits? I have only considered offshore as a tax shelter but would love to hear your thoughts/have you done this?
OK, if you don’t want to discuss on your site please visit mine and send me an email.
Would love to talk to you about potential business partnerships…
May 7th, 2007 at 5:01 pm
We also don’t qualify for Roth IRA but I read somewhere that if we contribute to a regular IRA in 2010 we will be able to convert our regular IRA to a Roth IRA as the law that limits Roth IRA to certain incomes expires in 2010. Anyone know anything about this?
May 8th, 2007 at 7:29 am
Yes, assuming that the taxes laws remain unchanged, the income limits for converting are set to go away in 2010. Thus, you can effectively circumvent the contribution limits by contributing now to a non-deductible IRA and then converting in 2010. You will owe taxes on the earnings, but not on the original contributions. But again, this depends on Congress not changing the law or closing the loophole so you’re rolling the dice.
May 17th, 2007 at 10:15 am
What if you contribute $4K to a ROTH and then discover that you’re over the MAGI limit? Like you get a big capital gain or bonus that you weren’t expecting.
I understand the phase-out method, but the Roth $4K isn’t even on my return as a deduction or adjustment that could be phased-out. I can’t really just say “do over” & withdraw it from my ROTH so what is the penalty?
May 17th, 2007 at 10:29 am
Carl, see here. In short, you can recharacterize your contributions, but the earnings will be subject to a penalty.
June 6th, 2007 at 12:26 pm
When opening a Roth IRA for a student, do we use her net or gross income? And what, if any, are the tax consequences of starting a Roth IRA by a student entering college?
February 13th, 2008 at 12:00 pm
What line on the 1040 is MAGI? line 37? Using this line, I am over the 2007 contribution limit.
My problem is that TTAX allows me to throw in about $3400 for both me and my wife before starting to knock down my tax rebate. Doesn’t this mean TTAX is making a mistake, OR, I am looking at the wrong line on the 1040?
February 15th, 2008 at 4:16 pm
I just had my taxes done and my MAGI is over the limit for 2007. We maxed out both of our Roth IRA’s and now I don’t know what I can or should do. MAGI is $173 and I believe the max is 166k. Can I pay the 6% on the $8000 and leave it in? I guess I don’t fully understand how this “excess” works since I believe I am in the category of “You should not have contributed anything into the Roth IRA”….AHHHH!!!!!
H.B. – I was also told it is line 37.
February 15th, 2008 at 6:56 pm
Mike:
You can reverse the contribution – it’s called a re-characterization. Just contact the company with whom you hold the Roth and let them know the situation and they can help you, so you can avoid the 6% penalty; looks like you have to pay a penalty on the earnings, though. Not sure if you convert to a regular IRA if the penalty on earnings applies. I would contact the broker or mutual fund company. You just have to make the adjustment before your tax filing deadline.
March 27th, 2008 at 11:11 pm
Inadvertently overpaid into our Roth’s…is the 6% penalty carried over to next year (when we would not contribute until we are sure we are under the limit)?? Or is it only for this year?
Thanks so much, Toni