Contribution to Roth IRA
Terry,
We want to make a contribution to our son’s Roth IRA for tax year 2023. I understand max for 2023 is $6,500 and you have to earn that much to contribute the max. His total income was under that amount, but Adjust Gross Income is over that amount. Which Income amount do we base contribution on? Websites are terribly confusing. Thanks!
Terry Says
Well, it’s too late to contribute for 2023 now. Sorry I didn’t get this to you before the April 15th deadline.
And your question is confusing, because AGI is typically less than total income. I’m not quite sure how you’re figuring it. And the income used for Roth eligibility is called MAGA– Modified Adjusted Gross Income!
Now is the time to make a 2024 contribution — so ask him if he will be eligible this year. He should consult his tax advisor.
And my suggestion is to make it a “matching grant” — where you contribute up to what he puts in — up to the limits, and assuming he will be eligible based on income.
Read this on 2024 limits for Roth Contributions in 2024:
https://www.kiplinger.com/retirement/roth-ira-limits
