Roth IRA Contribution Limits in 2018 -- and How to Work Around Them
Few investments let you enjoy tax-free growth, but Roth IRAs are one of the most popular as well as being easy to use. You don't get an upfront tax deduction on the money you put into a Roth, but in exchange, you'll never have to pay tax on that money if you meet certain legal requirements. Roth IRA contribution limits remain $5,500 in 2018, the same as they were in 2017, and those who are 50 or older can contribute an additional $1,000 to make their total $6,500. Not everyone is allowed to make the full contribution amount, and depending on what your income is, you could be locked out of Roth IRA contributions entirely. However, there's another way you can get money into a Roth IRA. Below, you'll learn more about the Roth IRA contribution limits and some things you can consider to work around them.
Roth IRA contributions are tied to certain income thresholds. Under current law, there are two threshold amounts: one above which you can make only partial contributions to a Roth, and a higher one above which no contributions are allowed at all.
The thresholds are based on modified adjusted gross income. To figure that amount, start with all of your income, and then reduce the total by the amount of allowed deductions that you'll find on the front page of the 1040 tax form. This includes things like moving expenses, educator expenses, early withdrawal penalties for CDs at banks, and health savings account deductions. You'll also get to subtract any income you had to include due to having done a Roth conversion during the year.
Source: Fool.com
