The IRS quietly redrew the line on who can fund a Roth IRA next year, and a lot of households sitting just above last year's cutoff are about to get a surprise.
For 2025, the income phase-out for single filers starts at $150,000 and ends at $165,000.
For married couples filing jointly, it runs from $236,000 to $246,000.
That's up from $146,000–$161,000 for singles and $230,000–$240,000 for couples in 2024.
The bump is modest, but it matters if you're anywhere near the ceiling — because the Roth's biggest selling point is that qualified withdrawals in retirement come out tax-free.
Here's how the phase-out actually works, since this trips people up every year.
You don't lose the whole contribution the moment you cross the threshold.
Your allowed amount shrinks gradually as income rises, and you only get fully locked out once you pass the top of the range.
Say you're single and earn $157,500 — halfway through the phase-out.
You can still contribute roughly half of the $7,000 annual limit, or about $3,500.
Earn $165,000 or more and your direct contribution drops to zero.
The 2025 contribution cap stays at $7,000, with an extra $1,000 catch-up if you're 50 or older.
One number people constantly get wrong: the income that counts is your modified adjusted gross income, not your salary on your W-2.
That figure can land higher or lower depending on deductions, investment income, and other factors, so it's worth running the math before you assume you're eligible.
If you do get phased out, the backdoor Roth remains the workaround many savers use — making a nondeductible traditional IRA contribution and then converting it.
It's legal, but it comes with paperwork and a pro-rata rule that can create an unexpected tax bill if you hold other traditional IRA money.
Talk to a tax professional before going that route.
There's also a quieter option: if you're married and one spouse earns little or no income, a spousal Roth IRA may let that partner contribute based on joint income.
Same limits apply, but it's a detail plenty of couples overlook.
Check your projected MAGI now, not in April, because contributions for the year can be made up until the tax filing deadline.
If you're close to the line, a year-end bonus or a mutual fund distribution could push you over — and fixing an excess contribution after the fact means penalties and extra forms.
For households in the $150,000 to $250,000 band, this is the year to be deliberate.
A five-minute check could be the difference between a tax-free retirement bucket and a missed opportunity.
The limits keep drifting upward with inflation, but they never quite keep pace with rising incomes, so more middle-to-upper earners find themselves boxed out each year.
Final Thoughts
If you're near the threshold, treat eligibility as something to verify annually rather than assume — and don't let a small oversight cost you decades of tax-free growth.