Contributions to IRAs and Roth IRAs are aggregated. For 2025, the total contributions you make to all of your Roth IRAs and Traditional IRAs cannot exceed the following amounts:
- Remains $7,000 ($8,000 if you’re age 50 or older), or
- if less, your taxable compensation for the year
| IRA and Roth IRA contribution limits | ||
|---|---|---|
| Year | Under age 50 | Age 50 and older |
| 2024 | $7,000 | $8,000 |
| 2025 | $7,000 | $8,000 |
IRA account holders make non deductible IRA contributions instead of Roth IRA contributions if their income is too high.
See the following chart to determine if you make too much.
This table shows whether your contribution to a Roth IRA is impacted by the amount of your modified AGI as computed for Roth IRA purpose.
| If your filing status is… | And your modified AGI is… | Then you can contribute… |
|---|---|---|
| married filing jointly or qualifying widow(er) | < $236,000 | up to the limit |
| married filing jointly or qualifying widow(er) | > $236,000 but < $246,000 | a reduced amount |
| married filing jointly or qualifying widow(er) | > $246,000 | zero |
| married filing separately and you lived with your spouse at any time during the year | < $10,000 | a reduced amount |
| married filing separately and you lived with your spouse at any time during the year | > $10,000 | zero |
| single, head of household, or married filing separately and you did not live with your spouse at any time during the year | < $150,000 | up to the limit |
| single, head of household, or married filing separately and you did not live with your spouse at any time during the year | > $150,000 but < $165,000 | a reduced amount |
| single, head of household, or married filing separately and you did not live with your spouse at any time during the year | > $165,000 | zero |
The Conversion of Non Deductible IRAs are Subject to the Pro-rata Rules.
Subject to the pro-rata rule, which calculates the taxable portion of the conversion based on the ratio of after-tax contributions to the total balance across all traditional IRAs (including SEP and SIMPLE IRAs).
The IRS won’t let you simply convert only the after-tax dollars. Instead, they make you calculate what percentage of your total IRA balances is after-tax money. That percentage of your conversion will be tax-free, while the remainder will be taxed as ordinary income.
Solo 401k
Required minimum distributions (RMDs): Starting in 2024, neither Roth IRAs nor Roth 401ks have RMDs. Previously, only Roth IRAs avoided RMDs.
- Loans: You can’t borrow from a Roth IRA, but you may be able to take a loan from a Roth 401k if your plan allows it (like our Solo 401k plan does).
- Unrelated debt-financed income (UDFI) tax: If your Roth IRA uses debt to invest in real estate, that income may be subject to UDFI tax. Solo 401ks are generally exempt from UDFI on income debt-financed Solo 401k real estate investments.
If you have enough earned income, you can contribute to both a solo 401k and a Roth IRA. Visit here to learn more.
Of course, if your adjusted gross income is to high, you can make a non deductible IRA contribution and then convert it to the Roth IRA.
