ira facts

Can I contribute to my Roth IRA?

Roth IRAs were created with the Taxpayer Relief Act of 1997 as an alternative to the Traditional IRA.  Although they share contribution limits, they differ in tax-treatment.  Traditional IRAs are tax-deferred, similar to a 401(k) plan.  This means that pre-tax money is contributed to the plan, and is taxed at ordinary income rates as it is withdrawn.  The Roth IRA gave taxpayers a different choice: pay tax now and avoid paying tax on future growth.  Read below to see if you can contribute to a Roth IRA. 

Do you or your spouse have earned income?

“Earned income” means income from wages, salaries, or bonuses.  An example of “unearned income” would be investment income or an inheritance.  If you have earned income, move on to the next question.  If you do not have any earned income, you are not eligible to contribute to a Roth IRA.  Note that if you only contribute to IRAs up to your earned income.  For example, if your earned income is $3,000 then your maximum contribution is $3,000.

Did you make a contribution to a Traditional IRA for the tax year?

If you have contributed to a Traditional IRA this tax year, the amount contributed will count against your $6,000 (2019) allowed IRA contribution for the year.  If you have not contributed to a Traditional IRA or have not contributed the full allowable amount, then you will be able to contribute to your Roth.

What is your tax-filing status?


If your Modified Adjusted Gross Income (MAGI) is less than $193,000, then you and your spouse can make a full contribution. If your income is between $193,000 and $203,000 you will be subject to the contribution phase-out.  You will be able to make a partial contribution to your Roth IRA.  If your income is $203,000 or greater, you are above the income limit and allowed no Roth IRA contribution.


If your Modified Adjusted Gross Income (MAGI) is less than $122,000, then you can make a full contribution. If your income is between $122,000 and $137,000 you will be allowed a partial contribution. If your income exceeds $137,000, no Roth IRA contribution is allowed.

If you’ve made it this far, there is a good chance you can contribute to a Roth IRA.  Check out this flowchart to learn more.

If you would like to schedule a call to talk about contributing for a Roth IRA, give us a call at 303-440-2906 or click here to schedule a time to speak with us.


Robert J. Pyle, CFP®, CFA is president of Diversified Asset Management, Inc. (DAMI). DAMI is licensed as an investment adviser with the State of Colorado Division of Securities, and its investment advisory representatives are licensed by the State of Colorado. DAMI will only transact business in other states to the extent DAMI has made the requisite notice filings or obtained the necessary licensing in such state. No follow up or individualized responses to persons in other jurisdictions that involve either rendering or attempting to render personalized investment advice for compensation will be made absent compliance with applicable legal requirements, or an applicable exemption or exclusion. It does not constitute investment or tax advice. To contact Robert, call 303-440-2906 or e-mail


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