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made to Roth IRAs and designated Roth accounts ac- cording to your eligibility to participate. A contribution to one doesn’t impact your eligibility to contribute to the other. See Pub. 575 for more information on designated Roth accounts. Introduction Regardless of your age, you may be able to establish and make nondeductible contributions to an individual retire- ment plan called a Roth IRA. Contributions not reported. You don’t report Roth IRA contributions on your return. What Is a Roth IRA? A Roth IRA is an individual retirement plan that, except as explained in this chapter, is subject to the rules that apply to a traditional IRA (defined next). It can be either an ac- count or an annuity. Individual retirement accounts and annuities are described in chapter 1 under How Can a Traditional IRA Be Opened. To be a Roth IRA, the account or annuity must be des- ignated as a Roth IRA when it is opened. A deemed IRA can be a Roth IRA, but neither a SEP IRA nor a SIMPLE IRA can be designated as a Roth IRA. Unlike a traditional IRA, you can’t deduct contributions to a Roth IRA. But, if you satisfy the requirements, quali- fied distributions (discussed in chapter 2 of Pub. 590-B) are tax free. Contributions can be made to your Roth IRA after you reach age 701/2 and you can leave amounts in your Roth IRA as long as you live. Traditional IRA. A traditional IRA is any IRA that isn’t a Roth IRA or SIMPLE IRA. Traditional IRAs are discussed in chapter 1. When Can a Roth IRA Be Opened? You can open a Roth IRA at any time. However, the time for making contributions for any year is limited. See When Can You Make Contributions, later, under Can You Con- tribute to a Roth IRA. Can You Contribute to a Roth IRA? Generally, you can contribute to a Roth IRA if you have taxable compensation (defined later) and your modified AGI (defined later) is less than: • $199,000 for married filing jointly or qualifying widow(er); • $135,000 for single, head of household, or married fil- ing separately and you didn’t live with your spouse at any time during the year; and • $10,000 for married filing separately and you lived with your spouse at any time during the year. You may be able to claim a credit for contributions to your Roth IRA. For more information, see chap- ter 3. Is there an age limit for contributions? Contributions can be made to your Roth IRA regardless of your age. Can you contribute to a Roth IRA for your spouse? You can contribute to a Roth IRA for your spouse provi- ded the contributions satisfy the Kay Bailey Hutchison Spousal IRA limit discussed in chapter 1 under How Much Can Be Contributed, you file jointly, and your modified AGI is less than $199,000. Compensation. Compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts re- ceived for providing personal services. It also includes commissions, self-employment income, nontaxable com- bat pay, military differential pay, and taxable alimony and separate maintenance payments. For more information, see What Is Compensation under Who Can Open a Tradi- tional IRA? in chapter 1. Modified AGI. Your modified AGI for Roth IRA purposes is your adjusted gross income (AGI) as shown on your re- turn with some adjustments. Use Worksheet 2-1 to deter- mine your modified AGI. Don’t subtract conversion income when figuring your other AGI-based phaseouts and taxable in- come, such as your deduction for medical and dental expenses. Subtract them from AGI only for the pur- pose of figuring your modified AGI for Roth IRA purposes. How Much Can Be Contributed? The contribution limit for Roth IRAs generally depends on whether contributions are made only to Roth IRAs or to both traditional IRAs and Roth IRAs. Roth IRAs only. If contributions are made only to Roth IRAs, your contribution limit generally is the lesser of: • $5,500 ($6,500 if you are age 50 or older), or • Your taxable compensation. However, if your modified AGI is above a certain amount, your contribution limit may be reduced, as ex- plained later under Contribution limit reduced. Roth IRAs and traditional IRAs. If contributions are made to both Roth IRAs and traditional IRAs established for your benefit, your contribution limit for Roth IRAs gen- erally is the same as your limit would be if contributions were made only to Roth IRAs, but then reduced by all con- tributions for the year to all IRAs other than Roth IRAs. TIP CAUTION ! Chapter 2 Roth IRAs Page 39