The IRS has raised the income thresholds that determine who can contribute to a Roth IRA, and the bump is larger than many retirement savers expected.
For 2025, single filers can earn up to $150,000 before their contribution allowance starts shrinking, up from $146,000 last year.
Married couples filing jointly get a ceiling of $236,000, a $6,000 increase from 2024.
Those numbers matter because the Roth IRA is one of the few retirement accounts where growth and withdrawals in retirement can be completely tax-free.
Crossing the limit doesn't shut you out entirely — it phases you out gradually.
Single filers lose eligibility completely at $165,000, while joint filers hit zero at $246,000.
If you're in the phase-out zone, you don't lose your whole $7,000 contribution ($8,000 if you're 50 or older).
The IRS lets you contribute a reduced amount, and there's a worksheet in Publication 590-A to calculate it.
Skip that step and you could face a 6% excise tax on excess contributions for every year the money stays in the account.
The higher limits are welcome news after two years of stubborn inflation pushed wages up across many industries.
A nurse, teacher, or mid-level manager who got a cost-of-living raise in 2024 might have been pushed over the old threshold without realizing it.
That's a paperwork headache most people don't discover until tax season.
For high earners who are locked out, the backdoor Roth strategy still works.
You contribute to a traditional IRA — which has no income limit — then convert it to a Roth.
The catch: if you already hold pre-tax money in a traditional IRA, the conversion triggers taxes under the pro-rata rule.
That's why financial planners often tell people to check their existing IRA balances before attempting it.
One more deadline worth circling: you have until the April 15 tax filing deadline to make a 2024 contribution, but the new 2025 limits apply only to contributions made during the 2025 calendar year.
The IRS treats each tax year separately, and your income for the year you're contributing is what counts.
Our take: the phase-out range is narrow, which means a single bonus or year-end raise can quietly knock you out of eligibility.
If your income is anywhere near these thresholds, run the numbers before you fund the account — and consider automating contributions early in the year, before an unexpected pay bump changes the math.
Final Thoughts
A few minutes with a calculator beats a 6% penalty later.