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What is the Roth IRA Contribution Limit for 2016?
Anna T. Murphy, CPA, Partner
April 2016

Individuals may contribute up to $5,500 to a traditional and a Roth IRA for 2016. This is the same limit as 2015. An individual age 50 and older can made a catch-up contribution of an additional $1,000 for the year.

The contribution is limited to the taxpayer’s taxable compensation for the year, minus contributions to all non-Roth IRAs.

Taxpayers can contribute to a Roth IRA as long as the taxpayer’s adjusted gross income for the year is less than:

  • $193,000 for married filing jointly or qualifying widow(er),
  • $131,000 for single, head of household, or married filing separately and you did not live with your spouse at any time during the year, and
  • $10,000 for married filing separately and you lived with your spouse at any time during the year.

Unlike traditional IRAs, the owner of a Roth IRA can make contributions to the IRA after turning age 70½ and does not have to begin taking contributions at that age. The mandatory distribution rules that normally begin at age 70 ½ do not apply until the owner dies.

Although contributions to a Roth IRA are not deductible, income accumulates tax-free and “qualified” distributions will also be tax-free, if certain conditions are satisfied:

  • The distribution must be made after the owner turns 59½, unless the owner is disabled or the payment is made to a beneficiary after the owner’s death; and
  • The amount contributed must be held in the Roth IRA for at least five years.

Taxpayers can also roll over benefits from an eligible retirement plan to a Roth IRA, without the rollover being counted against the annual contribution limit, provided the payment from the retirement plan is an eligible rollover distribution. The retirement plan can be a qualified plan, 401(k) plan, tax-sheltered annuity, or governmental deferred contribution plan. The payment will still be taxable, since contributions to a Roth IRA are not deductible and must be made with after-tax dollars.

For more information about IRAs contact Anna T. Murphy, CPA, Partner at 315.701.6330 or amurphy@gsacpas.com.


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