How much can you really contribute to your Roth IRA for the 2022 tax year?
If youve asked yourself this question, youre not alone. Were divulging the details on Roth IRA contribution limits for 2022 and any benefits you should take advantage of to reduce your income tax burden.
Be an informed investor.
Make investment decisions in the light. Social investing app Public.com is an advocate for the informed investor.
According to the Internal Revenue Service (IRS), the contribution limits for Roth IRAs in 2022 are:
These are the same contribution limits as traditional IRAs. However, Roth IRA contribution limits have an additional stipulation. The higher your ordinary income, the less you can contribute.
The income ranges below refer to modified adjusted gross income (MAGI), which is just your adjusted gross income minus any social security income (SSI).
| Filing status | Income range | Contribution eligibility |
|---|---|---|
| Married couple filing jointly (or qualifying surviving spouse) | Less than $204,000 | up to the limit |
| $204,001–$213,999 | a reduced amount | |
| $214,000+ | zero | |
| Married couple filing separately, living with your spouse at any time during the year | Less than $10,000 | a reduced amount |
| $10,000+ | zero | |
| Single, head of household, or married filing separately and not living with spouse at any point | Less than $129,000 | up to the limit |
| $129,001–$143,999 | a reduced amount | |
| $144,000+ | zero |
What does a reduced contribution limit look like? The IRS gives you step-by-step instructions on how to calculate your new limit.
If you want to invest for retirement over your contribution thresholds, consider a long-term portfolio in the Public investing app. This feature helps you lock investments in for the long haul, plus you can invest in other capital assets like crypto.
Here are some things to know about how Roth IRAs work so you can decide how it best fits into your retirement planning:
Filers cannot directly make tax deductions for Roth IRA contributions on a tax return (unlike traditional IRA contributions). But that doesnt mean there arent tax breaks for taxpayers in a Roth IRA.
Since Roth IRAs consist of after-tax dollars, you dont pay taxes upon withdrawal. This means no federal income tax down the line because youve already gotten it out of the way. (This is great for retirees who are leaving the workforce at a higher income tax bracket than when they were younger.)
Plus, you do not have to pay short-term capital gains tax or long-term capital gains tax when you withdraw money in a retirement savings account. (Naturally, the IRS puts a caveat on this: Just make sure youre at least 59.5 years old and have been investing in your Roth IRA for at least five years to enjoy those tax benefits.)
Consult with a tax professional to fully understand the tax breaks for Roth IRA contributions.
With just a bit of calculating, you can get a firm number for how much you can contribute to a Roth IRA in 2022. Knowing this, you can lay out clear retirement investment strategies for the year.
Be an informed investor.
Make investment decisions in the light. Social investing app Public.com is an advocate for the informed investor.
The Roth IRA contribution limit for a single filer in 2022 is up to $7,000, depending on age and taxable income. View the table above for more details.
A working spouse can fund an IRA for a non-working spouse in addition to funding their own IRA.
You can contribute to a Roth IRA at any point during the year until you reach the contribution limit.
The deadline to make a Roth IRA contribution for the 2022 tax year is April 14, 2023, one day before the tax filing deadline.
If your MAGI exceeds the IRS limits for Roth IRA contributions, you may have a reduced contribution limit or be ineligible to contribute.
It’s a good idea to keep a record of your Roth IRA contributions. If you need to withdraw your cost basis at any point, you can know how much you contributed before your investments gained value.
Roth IRA investors can invest in real estate investment trusts (REITs), exchange traded funds (ETFs), mutual funds, stocks, bonds, certificates of deposit (CDs), and even cryptocurrency depending on the brokerage.
