How to determine Roth IRA eligibility

A Roth IRA is a tax-advantaged method of saving for retirement. Most people are eligible to contribute to a Roth IRA, but there are some exceptions. Here's how to find out if you qualify.

	Determine if you have any income for the current year (or if you and your spouse have any income if filing jointly.) If not, you are not allowed to contribute to a Roth IRA. For example, most children cannot contribute because they generally don't have an income.
	Estimate your income for the current year. The value that the IRS is interested in is the Modified Adjusted Gross Income (MAGI). If your income is above $166,000 for married filing jointly, $114,000 for an individual or head of household, or $10,000 (yes, just ten thousand dollars) if married, but filing separately, then you cannot contribute anything.
	Again, looking at your MAGI, if your income is below $156,000 for married filing jointly, $99,000 for singles or heads of households, then you can contribute up to $5000 in 2008 (but in no case more than your income.)
	If you are above 50 years old, you can contribute an extra $1000 per year as a "catch up" contribution.

• Income in the form of interest and dividends and rental property income cannot be used to fund Roth IRAs, so if all your income is from those sources, then you probably don't qualify.
• If you are married filing jointly, then both spouses may contribute to a Roth IRA. There is no such thing as a jointly owned Roth IRA by IRS regulations.
• Amounts given in this article will be adjusted yearly by the IRS to account for inflation.