Roth IRA Contribution Income Limits 2023: Married Filing Jointly
If you’re married and filing jointly in 2023, you may be eligible to contribute to a Roth IRA. But before you do, you should make sure you meet the Roth IRA contribution income limits. In this article, we’ll explain the Roth IRA contribution income limits for married couples filing jointly in 2023, as well as the process for making a Roth IRA contribution.
2023 Roth IRA Contribution Income Limits for Married Filing Jointly
The Roth IRA contribution income limits for married couples filing jointly in 2023 are $203,000 or less in modified adjusted gross income (MAGI). If your MAGI is below this amount, you can contribute up to the annual contribution limit of $6,000 ($7,000 if you’re age 50 or older). If your MAGI is above this amount, you may still be able to make a Roth IRA contribution, but you’ll have to use a special calculation to determine how much you can contribute.
How to Make a Roth IRA Contribution
If you meet the Roth IRA contribution income limits, making a contribution is relatively simple. The first step is to open a Roth IRA account with a financial institution. Most banks, credit unions, and brokerage firms offer Roth IRA accounts. Once you’ve opened an account, you’ll need to make your contribution. You can make your contribution with a check, a money order, or an electronic transfer from a checking or savings account.
What Happens if You Exceed the Roth IRA Contribution Income Limits?
If you exceed the Roth IRA contribution income limits for married couples filing jointly in 2023, you may still be able to make a contribution. You’ll just need to use a special calculation to determine how much you can contribute. The calculation is based on your modified adjusted gross income (MAGI) and the amount of your contribution. Your total contribution cannot exceed the annual contribution limit of $6,000 ($7,000 if you’re age 50 or older).
What If You Make Too Much of a Roth IRA Contribution?
If you make too much of a Roth IRA contribution, you may be subject to a 6% tax penalty on the amount of the excess contribution. The 6% tax penalty applies only to the amount of the excess contribution, not to the total amount of the contribution. Additionally, you may be required to file an amended tax return to correct the excess contribution.
What Are the Benefits of Making a Roth IRA Contribution?
The primary benefit of making a Roth IRA contribution is that the funds in the account grow tax free. This can be beneficial if you expect to be in a higher tax bracket when you retire. Additionally, Roth IRA contributions are not subject to required minimum distributions, meaning that you can leave your funds in the account as long as you wish. Lastly, you can withdraw your contributions at any time without penalty, as long as you don’t withdraw any of the earnings.
What Are the Disadvantages of Making a Roth IRA Contribution?
The primary disadvantage of making a Roth IRA contribution is that the contributions are not tax deductible. This means that you won’t get an immediate tax benefit from the contribution. Additionally, if your modified adjusted gross income exceeds the Roth IRA contribution income limits, you may not be able to make a full contribution. Lastly, you may be subject to a 6% tax penalty if you make too much of a Roth IRA contribution.
Conclusion
If you’re married and filing jointly in 2023, you may be eligible to contribute to a Roth IRA. But before doing so, you should make sure you meet the Roth IRA contribution income limits. The Roth IRA contribution income limits for married couples filing jointly in 2023 are $203,000 or less in modified adjusted gross income (MAGI). If your MAGI is above this amount, you may still be able to make a contribution, but you’ll need to use a special calculation to determine how much you can contribute. The primary benefit of making a Roth IRA contribution is that the funds in the account grow tax free. However, there are also some potential disadvantages, such as the fact that the contributions are not tax deductible and that you may be subject to a 6% tax penalty if you make too much of a contribution.