Flirting With the Roth IRA Income Limits

I want to contribute the maximum $5,500 to my Roth IRA for 2014. However, my fiancé and I plan to get married this year and, once we do, we will go over the IRS income limit for married couples. What happens if I contribute to my Roth before we marry?

Congratulations on your upcoming wedding! Your marital status as of December 31 determines your marital status for the full tax year, no matter which month you get married. So you’ll be eligible to contribute to a Roth IRA only if your joint income is less than $191,000, even if you make the contribution before you get married. (The contribution amount starts to phase out if joint income is more than $181,000 in 2014. See Income Limits for Roth Contributions in 2014 for details.)

Because your joint income will exceed the limit, it’s better not to make a Roth contribution this year. Otherwise, you’d have to take the contribution (and any earnings on it) out of the Roth before the tax-filing deadline (April 15, 2015, or October 15, 2015, if you file an extension). See Undoing a Roth IRA for more information about the procedure.

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If your joint income is too high for a Roth this year, you can contribute to a nondeductible traditional IRA, then convert it to a Roth. If you have other money in traditional IRAs, you will have to pay taxes based on the ratio of any nondeductible contributions to the total balance in all of your traditional IRAs. See Getting Around Income Limits for a Roth IRA for more information about that strategy and the tax calculation.