How to Determine Who Qualifies for a Roth IRA

The Roth IRA is a popular retirement savings vessel because withdrawal after age 59 1/2 isn't taxed. You are already taxed, in essence, because you're contributing after tax dollars. It was originated with the Taxpayer Relief Act of 1997 and named after Senator William Roth from Delaware. Not everyone is eligible for a Roth IRA but for those that are it can be a valuable source of retirement investment.

Instructions

1. Consider yourself qualified if you are joint filing and your adjusted gross income is less than the published Roth IRA amount for that particular tax year. Your tax adviser or the IRS will know that figure ahead of time.

2. Qualify for the Roth if your individual adjusted gross income is below the benchmark for a single filer.

3. Check the contribution restrictions for joint or individual filers. This will determine what you should set aside. You can discover these limits and pay into your Roth only these amounts just before the end of the year if you want to.

4. Be innovative. Your children can be put on a payroll in your household and contribute money to a Roth IRA. There are limits, tax wise, on how much money you can pay your children but you will not have to pay the traditional federal deductions if they are under 18.

Tips & Warnings

• Make sure to consult your tax adviser or financial planner for the most recent developments in tax law and Roth IRA's.