The annual Roth IRA contribution limit in 2020 is $6,000 for adults under 50 and $7,000 for adults 50 and older. But there are other factors that could place further limits on how much you can contribute to your Roth IRA. 

Here's a closer look at the factors that influence your annual Roth IRA contribution limit and how to figure out what yours is for this year.

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Factors affecting your Roth IRA contribution limit

The following factors play a role in determining how much you can contribute to your Roth IRA:

  • Annual limit set by the IRS: The IRS sets annual limits every year dictating the maximum a person may contribute to a Roth IRA.
  • Age: Adults 50 and older are eligible to make catch-up contributions annually. The IRS also sets limits on how much extra these individuals may contribute in a year.
  • Modified adjusted gross income (MAGI): Your MAGI is your adjusted gross income (AGI) -- your gross income minus certain tax deductions -- with some of those tax deductions added back in. Those with MAGIs over certain thresholds may not be able to contribute up to the annual limit or may not be able to contribute directly to a Roth IRA at all. Read on for more information on how to calculate your MAGI.
  • Tax filing status: The government evaluates your MAGI based on your tax filing status. See the table below for details.
  • Contributions to traditional IRAs: The IRS limit applies to all your IRA contributions during the year, so if you've already put some money into a traditional IRA, you must subtract this contribution from the annual limit to determine how much you can still contribute to your Roth IRA.
  • Earned income: You cannot contribute more money than you've earned during the year to your Roth IRA. So if you earned only $3,000, that's the most you could contribute during the year, though the annual limit is double that. For married couples, both may contribute up to the annual limit as long as one spouse has earned enough to cover all of these contributions during the year.

Roth IRA contribution limits in 2020 by MAGI and tax filing status

The following table lays out how much you can contribute to your Roth IRA in 2020 based on your tax filing status and your MAGI.

Tax Filing Status

Contribute up to the IRS limit if your MAGI is under:

Contribute a reduced amount if your MAGI is between:

Contribute nothing if your MAGI is over:

Single, head of household, or married filing separately if you didn't live with your spouse at all during the year

$124,000

$124,000 and $139,000

$139,000

Married filing jointly or qualifying widow(er)

$196,000

$196,000 and $206,000

$206,000

Married filing separately if you lived with your spouse at any point during the year

N/A

$0 and $10,000

$10,000

Source: IRS

Single adults with MAGIs under $124,000 may contribute up to the annual contribution limit for 2020 -- $6,000, or $7,000 if they're 50+. Married couples with MAGIs under $196,000 may each contribute up to the annual limit.

Single adults with MAGIs over $139,000, married couples filing jointly with MAGIs over $206,000, and married couples filing separately who lived together and have an MAGI over $10,000 may not contribute any money directly to a Roth IRA. However, they can use a backdoor Roth IRA. This is where you contribute money to a traditional IRA and then do a Roth IRA conversion in the same year. It's a few more hoops to jump through, but it'll get you to the same place in the end.

If your MAGI falls between the two thresholds for your tax filing status, follow the steps below to figure out how much you're allowed to legally contribute to a Roth IRA this year.

How to calculate your reduced Roth IRA contribution limit

The first step in calculating how much you can contribute is to nail down your MAGI. Start with your gross income -- all the money you earn during the year -- and subtract any money spent on certain tax deductions, including:

  • Half of your self-employment taxes, if applicable
  • Student loan interest
  • Tuition and fees
  • Unreimbursed medical expenses exceeding 10% of your AGI
  • Health savings account (HSA) contributions
  • Tax-deferred retirement account contributions
  • Health insurance premiums, if self-employed
  • Qualified educator expenses
  • Penalties for early withdrawal of retirement savings

The result is your AGI. You can also find this number for previous years on your tax return, which might give you a close estimate of your AGI for this year if your income and spending habits haven't changed significantly.

To calculate your MAGI, take your AGI and add back some of these deductions, including:

  • Student loan interest
  • Tuition and fees
  • IRA contributions
  • Half of your self-employment taxes
  • Rental losses
  • Passive losses or passive income
  • Employer-paid adoption expenses
  • Foreign earned income or housing exclusions
  • Losses from publicly traded partnerships
  • Taxable Social Security payments (excluding SSI)

It's possible your MAGI could end up being the same as your AGI, though this isn't always true. Once you have this number, you can calculate your reduced Roth IRA contribution limit for the year using the following formula:

  1. Find your MAGI using the steps above.
  2. Choose the appropriate next step based on your tax filing status:
    • Single, head of household, or married filing separately if you didn't live with your spouse all year: Subtract $124,000 from your MAGI.
    • Married filing jointly or qualifying widow(er): Subtract $196,000 from your MAGI.
    • Married filing separately if you lived with your spouse at any point during the year: Proceed with your MAGI to the next step.
  3. Choose the appropriate next step based on your tax filing status:
    • Single or head of household: Divide your result from step 2 by $15,000.
    • Married filing jointly, married filing separately, or qualifying widow(er): Divide your result from step 2 by $10,000.
  4. Multiply your result from step 3 by $6,000, or by $7,000 if you're 50 or older.
  5. Subtract your result from step 4 from $6,000, or $7,000 if you're 50 or older.

To see how this works in practice, consider a single adult under age 50 who has a MAGI of $130,000. They would subtract $124,000 from their MAGI, getting $6,000. Then they'd divide that $6,000 by $15,000. That leaves 0.4. They'd multiply the 0.4 by the $6,000 annual Roth IRA contribution limit for adults under 50 and get $2,400. Finally, they'd subtract that $2,400 from the $6,000 limit for a maximum reduced contribution limit of $3,600. 

It sounds pretty complex, but it's not too difficult to figure out once you've got your MAGI. Keep in mind that the government changes the rules about who can contribute to a Roth IRA and how much they can contribute from year to year, so you should always check to see if anything's changed before making contributions in future years.