Roth limitations if filing taxes Married But Filing Separately

Retirement Roth IRA
1

Someone I know was told by their tax preparer that he cannot contribute to a Roth IRA if he earns more than $10,000 and files his taxes as Married Filing Separately. I find this had to believe. Any truth to this? I am also asking this on the Tax board.

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Hi @blacktreechaser,

That is correct.

Does that help you?

Gene
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Thank you. Who is that document from? I just cannot understand the reasoning of this limitation. Our dau makes art work, our son in law makes other creative content, they think the best way to file is separately.

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It is very rare to be worth filing separately.

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It is on the IRS site. https://www.irs.gov/pub/irs-news/at-01-54.pdf

But notice the heading: AT-2001-54. I have to figure 2001 is the year of publication, close to a quarter century ago. But at least some of the information is very out of date:

In general, if your only IRA is a Roth IRA, the maximum yearly contribution limit is the lesser of $2,000 or your taxable compensation.

However this says the same thing and is labeled as 2025.

I assume the limit is to close a loophole of some sort.

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It is correct if he lived with his spouse at any time during the year - even one night.

From IRS Pub 590-A 2024 Publication 590-A

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It’s been that way ever since Roth IRAs started. When Roth IRAs were implemented, Congress seemed to be much more concerned about allowing future income to be free of taxes, as evidenced by the fact that there used to be an income limit of $100k for being able to do conversions. They were also apparently concerned that couples where the spouses had combined income that was over the MFJ income limit for contributions, but one of the spouses had an income that was under the Single limit would file MFS in order to take advantage of that if they set the MFS limit at the Single limit. So they set a draconian income limit (and did not adjust it for inflation) for MFS contributions to try to fill that potential loophole.

AJ

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