The IRS quietly moved the goalposts on Roth IRAs again, and a lot of people who thought they were locked out may now qualify.
For 2025, the income phase-out ranges ticked upward, which means some middle and higher earners who got shut out last year can now contribute at least part of the $7,000 annual limit.
Single filers can make a full contribution if their modified adjusted gross income stays under $150,000, with the ability phasing out completely at $165,000.
Married couples filing jointly get a full contribution below $236,000, phasing out at $246,000.
Those numbers are up from 2024, when the single range topped out at $161,000 and joint filers capped at $240,000.
If you're married but file separately, the rules are brutal — the phase-out starts at $0 and ends at just $10,000, so you're likely capped unless your income is tiny.
The catch that trips people up most is the word "modified." Your MAGI isn't just your salary.
It can include bonuses, taxable investment income, and certain deductions added back.
A year-end bonus or a good run in a brokerage account can push you over a threshold you thought you'd cleared in January.
So what do you do if you're over the limit?
First, you could contribute to a traditional IRA instead — but the tax deduction there also phases out if you have a workplace retirement plan, and withdrawals get taxed later.
Second, if you have a side hustle or freelance income, a SEP or solo 401(k) might let you shelter more money than an IRA ever could.
Then there's the backdoor Roth, which remains legal and widely used.
You contribute to a traditional IRA (no deduction) and convert it to a Roth.
The catch is the pro-rata rule: if you already hold pre-tax money in any traditional IRA, the conversion gets messy and partly taxable.
People with a clean slate of IRA accounts have the smoothest path.
One more thing worth flagging: the contribution deadline for 2025 isn't December 31.
You can fund your IRA up until the tax filing deadline in April 2026.
That gives you time to see how your actual income shakes out before committing.
Timing matters here because the phase-out is based on the year the contribution is designated for, not when you make it.
If you contribute early in 2025 for 2025 and then get a raise, you might have to unwind it.
Contributing later, once you know your number, avoids that headache.
If you're close to a threshold, run the math before you max out.
Overcontributing means a 6% excise tax on the excess every year until you fix it, and the fix isn't always painless.
Our take: the annual limit bump is small enough that it won't change most people's lives, but it's a good excuse to check where you actually land.
Final Thoughts
If you're anywhere near the line, talk to a tax pro before you write the check — the cost of a quick conversation beats the cost of a penalty.