At Extreme Investor Network, we understand the importance of staying informed about changes in personal finance to help you make the best decisions for your financial future. That’s why we wanted to share the latest update on Roth IRA income phaseouts for 2025.
For those looking to contribute up to the limit in a Roth IRA, it’s crucial to be aware of the modified adjusted gross income (MAGI) thresholds. In 2025, the income phaseout range for single or head of household taxpayers making contributions to a Roth IRA has increased to between $150,000 and $165,000. This means that individuals within this income range can make partial Roth contributions, with the ability to make a full contribution if their MAGI is under $150,000.
On the other hand, for married couples filing jointly, the income phaseout range has also increased to between $236,000 and $246,000. Similarly, couples within this income range can make partial Roth contributions, with the option to make a full contribution if their MAGI is under $236,000.
It’s important to note that married couples filing separately have a phaseout range between $0 and $10,000, which is not subject to annual cost-of-living adjustments, according to the IRS.
For higher earners who may exceed these income limits, there is still a potential strategy to consider – mega backdoor Roth conversions. This method involves shifting after-tax 401(k) contributions to a Roth account, but it’s essential to check if your 401(k) plan allows for this strategy.
Additionally, the IRS recently announced several inflation adjustments for 2025, including changes to federal income tax brackets, higher capital gains brackets, a larger estate and gift tax exemption, and modifications to the eligibility criteria for the earned income tax credit.
Keeping up with these updates and understanding how they may impact your financial situation is crucial for effective financial planning. Stay tuned to Extreme Investor Network for more valuable insights and strategies to help you achieve your financial goals.