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Funding a Roth

TO CLAIM A TAX deduction for your traditional IRA contribution, much hinges on whether you are covered by a retirement plan at work. That doesn’t come into play with a Roth IRA. Instead, all that matters is your income.

If you are single or head of household and you have enough earned income, you can fully fund a Roth IRA in 2020 if your modified adjusted gross income is less than $124,000. The amount you can contribute is phased out if your income is between $124,000 and $139,000. Above $139,000, no contribution is allowed. For 2021, the phaseout range is $125,000 to $140,000.

If you are married filing jointly, your ability to fund a Roth phases out if your combined income is between $196,000 and $206,000 in 2020 and between $198,000 and $208,000 in 2021.

What if you’re eligible to make only a partial Roth contribution of, say, $3,500 out of 2020 and 2021’s possible $6,000? You can put the remaining $2,500 in a traditional IRA, though your contribution won’t necessarily be tax-deductible.

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