Roth IRA Income limits

[podey]

Hey all , I'm new here, but have been lurking for the past few days reading all the great threads.

I am 31, in the finance field and have been investing seriously since my 2nd year in undergrad. It looks like 2007 will be the last year I can invest in my Roth IRA because my AGI (after all pre-tax deductions, medical, dental, 401k, HSA, etc.) will exceed the $95,000 next year. I have read somewhere where there is graduated contributions in the range of $95,000-110,000. Can someone please elaborate. I may just fall into that category. Also are there any musings of this $95,000 limit being pushed up for 2009 or thereafter?

Thanks,
Nicole

[Martha]

Nicole, here is an explanation of how the phase out works: Phase-Out Rules

[lucija]

I got the following from Wikipedia related to contribution income limits for 2007:

Single filers: Up to $99,000 (to qualify for a full contribution); $99,000-$114,000 (to be eligible for a partial contribution)

So, in 2007, as long as your MAGI is under $99K, you can contribute the max ($4k). If your MAGI falls within the phaseout range, you can contribute only a prorated portion of the $4k. For example, if your MAGI is $104k, then you can contribute up to $2.66k ((114-104)/(114-99)*4).

In 2008, you may be able to contribute up to $5k (if under 50). The income limits may be raised as well.

[podey]

Thanks, that's very helpful. The phase out explanation is exactly what I needed!

[EngineeringMyFinances]

When I have a tax question, I go the the IRS web site and type some words in the search box at the top of the page.

A search turned up the following for 2008.

The contribution amount allowed for Roth IRAs begins to phase out for joint filers with incomes exceeding $159,000 (up from $156,000) and $101,000 (up from $99,000) for singles and heads of household.