2017 Roth IRA Rules
We’ve written extensively about the benefits of a Roth IRA. There are however rules which govern eligibility and contribution limits. These rules can change year-to-year and are controlled by the IRS.
We outline the 2017 Roth IRA rules here.
2017 Roth IRA Income Limits
Your income limit determines the amount you can contribute to your Roth IRA each tax year. There are two factors which the IRS uses to determine this limit: your marital status and your income (more specifically your modified adjusted gross income or modified AGI).
If you are single, head of household, or married filing separately (did not live with spouse during tax year), you can contribute:
- Full amount if your income is less than $118,000
- Partial amount if your income is between $118,000 and $133,000
- No amount if your income is greater than or equal to $133,000. However, you can use the Backdoor Roth IRA method
If you are married filing jointly, you can contribute:
- Full amount if your income is less than $186,000
- Partial amount if your income is between $186,000 and $196,000
- No amount if your income is greater than or equal to $196,000. However, you can use the Backdoor Roth IRA method
If you are married filing separately and lived with your spouse during the tax year, your contribution is highly limited. You can only contribute a partial amount if your income is less than or equal $10,000.
Here’s a handy table summarizing the income limits:
|Single, head of household, or married filing separately||Less than $118,000||Full amount|
|Between $118,000 and $133,000||Partial amount|
|Greater or equal to $133,000||Zero. Use Backdoor Roth IRA|
|Married filing jointly||Less than $186,000||Full amount|
|Between $186,000 and $196,000||Partial amount|
|Greater or equal to $196,000||Zero. Use Backdoor Roth IRA|
|Married filing separately (lived with spouse)||Less than $10,000||Partial amount|
|Greater than or equal to $10,000||Zero|
History of Roth IRA Income Limits
A quick history of the income limits for the Roth IRA and their change over time:
|Year||Single, head of household, or married filing separately||Married filing jointly||Married filing separately (lived with spouse)|
|2017||$118,000 - $133,000||$186,000 - $196,000||$0 - $10,000|
|2016||$117,000 - $132,000||$184,000 - $194,000||$0 - $10,000|
|2015||$116,000 - $131,000||$183,000 - $193,000||$0 - $10,000|
|2014||$114,000 - $129,000||$181,000 - $191,000||$0 - $10,000|
|2013||$112,000 - $127,000||$178,000 - $188,000||$0 - $10,000|
|2012||$110,000 - $125,000||$173,000 - $183,000||$0 - $10,000|
|2011||$107,000 - $122,000||$169,000 - $179,000||$0 - $10,000|
|2010||$105,000 - $120,000||$167,000 - $177,000||$0 - $10,000|
2017 Roth IRA Contribution Rules
If you satisfy the 2017 Income Limits, you can contribute up to $5,500 per tax year if you are under 50 years old and $6,500 if you are older (the IRS allows this in the form of a “catch up”).
This limit is subject to your total contribution across all IRAs, not just one. For example, if you have both a Roth IRA and Traditional IRA, you are allowed to contribute to both provided the sum for the tax year does not exceed $5,500 (or $6,500 if you’re over 50 years old).
History of Roth IRA Contribution Limits
The history of the Roth IRA contribution limits is below. The amount allowed by the IRS since 2006 has not increased substantially.
|Year||Contribution Limit Under 50||Contribution Limit 50 and Older|
|2013 - 2017||$5,500||$6,500|
|2008 - 2012||$5,000||$6,000|
|2006 - 2007||$4,000||$5,000|
2017 Roth IRA Rollover Rules
Roth IRAs can only be rolled over to other Roth IRA accounts. However, typically any other retirement account (Traditional IRA, 401(k), SEP IRA) can be rolled over to a Roth IRA.
There are a handful of things to keep in mind:
- You’re allowed only one rollover in a 12-month period
- You have 60 days to rollover the account from the time you receive the distribution
- If necessary, you’ll need to pay tax on distributions
Funds rolled over to your IRA account from other retirement accounts like a 401(k) do not count towards the contribution limit.
2017 Roth IRA Conversion Rules
Prior to the 2010 tax year, those with income greater than $100,000 could not convert a Traditional IRA to a Roth IRA. That limit has since been removed (and allows the ability to conduct a Backdoor Roth IRA).
Keep in mind, converting a Traditional IRA to a Roth IRA can subject you to taxes. If in doubt, consult your accountant or lawyer before any conversions.
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