The maximum IRA contribution did not increase for both the Traditional IRA and Roth IRA. 2012 Roth IRA Max Contribution will remain the same as the 2010 and 2011 IRA maximum contribution limit at $5,000 for the year 2012.That’s three years in a row with no changes.
The 2012 Maximum Catch-up Contribution for those aged 50 and overwas the same as 2010 and 2011 at an additional $1,000 over $5,000 that means if the owner is above 50 years of age then he/she can contribute $6,000 to the Roth.Roth IRA Max Contribution is also based on the Roth IRA Income Limits for each year Roth IRA’s provide a great way to limit the tax liability in the future. There are, however, contribution phase out limits based on the owners income that can limit the ability to contribute and the amount of contribution depend on the marital status and whether your compensation falls within modified adjusted gross income (MAGI) of the individual and the requirements to be fulfilled for the contribution for the current year. The amount of your contribution limit depends on your marital status. The Income Limits 2012 are
•Single or married filing separately and you did not live with your spouse at any time during the year can contribute up to the $5,000 max if the income is between $110,000 – $125,000 the contribution limit is phased out if the income is above $125,000 and the owner cannot contribute to a Roth IRA.
•Married filing jointly can contribute up to the $5,000 max. If the income is between $173,000- $183,000 the contribution limit is phased out if the income is above $183,000 and the owner cannot contribute to a Roth IRA.
•Married filing separately and lived with spouse at any time during the yearcan contribute up to the $5,000 maximum or $6,000 if over 50 years and is allowed to contribute to a Roth if the income is between $0- $10,000 but if the income is above $10,000 the owner cannot contribute to a Roth IRA.
The Roth IRA can be set up any time of the year depending on the requirement a the situations but the time for contributions is limited, the contributions are charged based on the income of the owner and the income must be earned income from wages, salaries, bonuses, tips, professional fees, commissions, etc. Contributions cannot be made to the Roth IRA but in case of dual ownership or for married couples contributions can be made by joining the income of the spouse but the income tax return must be filled together.