You can withdraw earnings from a Roth IRA, but it may trigger taxes and penalties depending on your age and that of the account. The 2020 combined annual contribution limit for Roth and traditional IRAs is $6,000 ($7,000 if you're age 50 or older)—unchanged from 2019. The second way to earn eligible income is to run your own business or farm. Also, rollovers from one Roth IRA to another are not taken into account for purposes of making annual contributions. . If your income happens to fall within the 'phase-out' range, you are only allowed to make a prorated contribution. IRS Publication 590-A provides a worksheet to figure out MAGI and the allowable contribution amounts.. Internal Revenue Service. Note that an individual must reach age 50 by December 31 of the year the contribution is intended. For 2018, the contribution limit for a Roth IRA is $5,500 with an additional $1,000 catch-up for individuals over the age of 50. 451 Individual Retirement Arrangements (IRAs). Wages earned by penal institution inmates. You'll still pay the 6% penalty this year, but you'll be set going forward. Otherwise, your eligibility is phased out between MAGI of $0 and $10,000. Those that meet the Roth IRA income limits can make the max Roth IRA contribution, which is reviewed and adjusted annually. Each year that you make a Roth IRA contribution, the custodian or trustee will send you Form 5498, IRA Contributions. A Roth IRA is a retirement savings account that allows you to withdraw your money tax-free. For 2021, that’s $6,000, or $7,000 if you’re age 50 and up. We also reference original research from other reputable publishers where appropriate. If an individual under 50 deposits $2,500 in one IRA for the tax year 2020, then that individual can only contribute $3,500 to another IRA in that tax year., Contributions to a Roth IRA can be made up until tax filing day of the following year. 1 There are no income limits for converting Traditional IRA assets to a Roth IRA.. 2 For married taxpayers filing separately: If you did not live with your spouse at any time during the tax year, see the “single” filing status. "H.R.1994 - Setting Every Community Up for Retirement Enhancement Act of 2019." "Form 8880: Credit for Qualified Retirement Savings Contributions." For 2020, the Roth IRA contribution limit is $6,000, which is the same amount as the traditional IRA limit. These rules cover contribution limits, income limits, and how you can withdraw your money.. Even if you are above IRS limits to deduct an IRA or contribute to a Roth IRA, you can still contribute to a non-deductible IRA. "Amount of Roth IRA Contributions That You Can Make for 2020." Accessed April 17, 2020. In general, you can withdraw earnings without penalties or taxes as long as you’re 59½ or older and you’ve owned the account for at least five years. The Roth IRA contribution limit is $6,000 for 2019, up from $5,500 in 2018. 2020 Roth IRA Income Limits. These limits are the maximum each person — or married couple — can contribute. These limits are the maximum each person — or married couple — can contribute. In the past, participants in a traditional IRA could not make contributions after age 70½. How can this happen? Minimum investment: There is no minimum to open the account. Pay you received while an inmate in a penal institution. Taxpayers who are married and filing jointly must have incomes below $66,000. In addition, if your income exceeds certain levels, the maximum Roth IRA contribution may be lower than the above amounts, or you may not be able to contribute to a Roth IRA at all. Unfortunately, IRS rules prevent you from maintaining joint Roth IRAs—that's why the word "individual" is in the account name. Withdrawals of earnings are free from federal income tax, provided the Roth IRA has been in existence for five years and you are at least 59½. Internal Revenue Service. For example, if you are a head-of-household whose AGI in the 2021 tax year shows income of no more than $29,625, contributing $2,000 or more to a Roth IRA generates a $1,000 tax credit—the maximum 50% credit. Both earn $87,500 a year, and both have Roth IRAs. RMDs (Required Minimum Distribution) are not required. Annual IRA limits may seem small, but combined with tax breaks and compounding, your savings can add up significantly over time. "Retirement Savings Contributions Credit (Saver’s Credit)." You can structure a spousal IRA as a traditional or Roth IRA. In 2021, they can each contribute the maximum of $6,000 to their accounts, for a total of $12,000. , Couples with highly disparate incomes might be tempted to add the higher-earning spouse's name to a Roth account to increase the amount they can contribute. Contribution Limits For Roth & Traditional IRA In 2021 The contribution limit for both Roth and Traditional IRAs will remain the same this year. Retirement savers 50 and older can contribute an extra $1,000. The saver's credit is available to individuals, heads of households, and joint filers who contribute to an IRA, 401(k), or any other qualified retirement account, and whose adjusted gross income falls within certain parameters. You can add $1,000 to those amounts if you're 50 or older. Roth IRA contribution limits for 2019 are now $6,000, up from the $5,500 limit allowed during the previous six years. Internal Revenue Service. Withdraw the excess contribution (and any earnings on it) before the April tax deadline. The backdoor Roth IRA contribution is a strategy and not a product or a type of IRA contribution. If you are under 50 years old that means you can still contribute $6,000 to your IRA accounts, same as last year. IRA contributions cannot exceed a minor's earnings, e.g., if a minor earns $1,000, then only $1,000 can be contributed to the account. A married couple with an AGI of, say, $60,000 could save $400 on their 2020 tax bill by contributing $2,000 to each ($4,000 total) of their IRAs (the 10% level). Learn why a Roth IRA may be a better choice than a traditional IRA for some retirement savers. Accessed Feb. 27, 2020. Doing so will help you demonstrate that you’ve met the five-year holding period for taking tax-free distributions of earnings from the account. For 2021, 2020 and 2019, the total contributions you make each year to all of your traditional IRAs and Roth IRAs can't be more than: $6,000 ($7,000 if you're age 50 or older), or If less, your taxable compensation for the year This retirement savings credit is up to $1,000, depending on your filing status, adjusted gross income (AGI), and Roth IRA contribution. 451 Individual Retirement Arrangements (IRAs)." Here are the saver's credit rates for 2020:. Accessed Feb. 27, 2020. Internal Revenue Service (IRS). Roth IRA Contribution Limits for 2019. Internal Revenue Service. If you're age 50 or older, you can add an extra $3,000.. Individuals age 50 and over can contribute up to $1,000 extra per year to “catch up” for a total of $7,000. The Roth IRA is attractive for lower-income earners because you get to contribute lower-tax or no-tax money. You can take out your Roth IRA contributions at any time, for any reason, without owing any taxes or penalties. A traditional IRA (individual retirement account) allows individuals to direct pre-tax income toward investments that can grow tax-deferred. A Roth IRA can be an excellent way to stash away money for your retirement years. But things get messier if you earn a lot of money. You’re also able to make a catch up contribution of $1,000 – which pushes the contribution limit to $7,000. Previously, if you converted another tax-advantaged account (SEP IRA, SIMPLE IRA, traditional IRA, 401(k) plan, or 403(b) plan) to a Roth IRA and then changed your mind, you could undo it in the form of a recharacterization. The maximum contribution for 2021 is $6,000; if you’re age 50 or over, it is $7,000. Internal Revenue Service (IRS). You can contribute to Roth IRAs only if your joint income is within certain limits. Henrietta can contribute to both her own IRA and to Henry's, up to the $12,000 max. Catch-up (50 years+) Contribution Limit; Traditional & Roth IRA contribution: July 15* 2019: $6,000: $1,000: 2020: $6,000: $1,000: 2021: $6,000: $1,000: SEP IRA contribution: SEP contributions must be made by the tax-filing deadline, which is the last day of the company's fiscal year. However, to make the maximum $6,000 Roth IRA contribution, an individual’s income must fall below a certain threshold. You must have "earned income" to contribute to an IRA. You can use this account in retirement or leave it as an inheritance for your heirs. With a Roth IRA, you have the opportunity to build your retirement savings tax-deferred and potentially enjoy tax-free income once you retire. The annual contribution limit for 2020 is $6,000, or $7,000 if you're age 50+. Unlike with the Traditional IRA or 401(k), contributions can be withdrawn at any time without taxes and penalties. Find out which IRA may be right for you and how much you can contribute. Say that Henrietta is the primary breadwinner, pulling in $170,000 a year; Henry runs the house, earning $5,000 annually. In general, you can contribute the full amount if your MAGI is below a certain amount. You can contribute to a traditional IRA regardless of how much money you earn. The income limits for a traditional tax-deferred IRA contribution are even lower than the Roth contribution limits. Excess Roth IRA contributions may be recharacterized into Traditional IRA contributions as long as the combined contributions do not exceed that tax year's limit. There are income limits on Roth IRAs, and your income will determine your eligibility for them. To be eligible for a spousal IRA, you must be married and file a joint tax return. This restriction is known as the 5-year rule. For 2021, the Roth IRA contribution limits are the same as they were in 2020: $6,000 for those under the age of 50 and $7,000 for those over the age of 50. There are Traditional IRA contribution limits to how much you can put in. That includes commissions, tips, bonuses, and taxable fringe benefits. Also—and again, unlike the traditional IRA—the fact that you participate in a qualified retirement plan has no bearing on your eligibility to make Roth IRA contributions. Internal Revenue Service. The income limits for a traditional tax-deferred IRA contribution are even lower than the Roth contribution limits. "How much can I contribute to my self-employed SEP plan if I participate in my employer’s SIMPLE IRA plan?" (2020 IRA limit remains unchanged at $6,000) November 1, 2018, WASHINGTON — IR-2018-211 , IRA limit increases to $6,000 Retirement Topics - SIMPLE IRA Contribution Limits, Married filing jointly or qualifying widow(er), Single, head of household, or married filing separately (and you didn't live with your spouse at any time during the year), Married filing separately (if you lived with your spouse at any time during the year), A full deduction up to the amount of your contribution limit, More than $104,000 but less than $124,000, More than $196,000 but less than $206,000. Glaser: And the limits for the deductible, traditional IRA are even lower than that? Only earned income can be contributed to a Roth IRA. Individual Income Tax Return, Retirement Savings Contributions Credit (Saver’s Credit). Accessed Feb. 27, 2020. "Disability and the Earned Income Tax Credit." "Can You Contribute to an IRA If You Don't Have a Job?" Income limits apply. For 2020, you can contribute as much as $6,000 to an IRA, or $7,000 if you're aged 50 and older. But you must have enough earned income to cover the contribution. Lower-income taxpayers may be eligible for the "saver's credit" if they contribute to an IRA. In 2020, the coronavirus stimulus bill—called the CARES Act—allows those affected by the coronavirus pandemic a hardship distribution of up to $100,000 without the 10% early distribution penalty those younger than 59½ normally owe. "Why Save In a Roth IRA in Your 20s and 30s." Accessed April 17, 2020. No longer. These include white papers, government data, original reporting, and interviews with industry experts. There are, however, contribution phaseout limits based on your income that can limit how much you can contribute. Tax-filing extensions do not apply to traditional IRA or Roth IRA contributions. You can make an additional catch up contribution of $1,000 … An additional voluntary contribution is a payment to a retirement savings account that exceeds the amount that the employer pays as a match. The contribution limit for Roth accounts is the same as it is for traditional IRAs; your total contributions to traditional and Roth IRAs cannot exceed $6,000 in 2020 and 2021 ($7,000 if you're 50 or older). The 2020 limit for contributions to Roth and traditional IRAs is $6,000, or $7,000 if you're aged 50 or older, remaining unchanged from 2019. If you participate in a workplace retirement plan, you won’t be eligible to contribute as an individual earning more than $75,000 or as a couple earning more than $124,000 in 2020. But there are restrictions that could affect how much you can contribute and what you can deduct on your tax return., For 2020, the most you can contribute to your Roth and traditional IRAs is a total of:. Most people can contribute up to $6,000 to a Roth IRA account as of 2021. Accessed April 17, 2020. Internal Revenue Service (IRS). They work well for people who are more likely to need tax relief later rather than sooner. The same applies to nondeductible contributions made to a 401(k) plan. To read more about the IRA deduction limits, refer to details available from the IRS.. Income Limits for Roth IRA Contributions; Because a Roth IRA is funded with after-tax dollars, qualifying withdrawals (typically in retirement) can be made on a tax-free basis. Contribution limits apply to other types of IRAs, as well. These include white papers, government data, original reporting, and interviews with industry experts. Roth IRA contribution limits for 2019 are now $6,000, up from the $5,500 limit allowed during the previous six years. Internal Revenue Service. The money then compounds tax-free. IRA contribution limits & deadlines. "Retirement Topics - IRA Contribution Limits." Accessed Feb. 27, 2020. If you contribute too much—or contribute to a Roth when your income is too high—you'll owe a 6% penalty on the excess contribution each year until you fix the mistake.. Accessed April 17, 2020. Here's a rundown of the 2020 Roth IRA income and contribution limits, based on your filing status and modified adjusted gross income:. Investors Older than 50 Years Old — If they’re older than 50 years old, IRA rules say they can place up to $7,000. IRAs in 2021 are unchanged from 2020 (and 2019): they have an individual contribution limit of $6,000, with an additional $1,000 allowed for earners 50+ years old. If you're a real early-bird filer, and you received a tax refund, you can apply some or all of it to your contribution. Accessed April 17, 2020. The 5-year rule deals with withdrawals from Roth and traditional IRAs. For uniformed services members, this does not apply to traditional contributions from combat-zone pay. Fidelity. These limits can change from one year to the next, and your age also affects how much you can invest. Subtract from the amount in (1): $198,000 if filing a joint return or qualifying widow(er), The good news is that some of those limits (tied to inflation) will increase in 2020 and 2021. If you're under age 50. January 2, 2019. Eligible income comes in two ways. The money then compounds tax-free. A Roth IRA is a retirement savings account that allows you to withdraw your money tax-free. The offers that appear in this table are from partnerships from which Investopedia receives compensation. The maximum you can contribute to a Roth IRA for 2019 is $6,000. Internal Revenue Service. … Amount of Roth IRA Contributions That You Can Make for 2018 Amount of Roth IRA Contributions That You Can Make for 2018. You can contribute to a Roth IRA only if your income is less than a certain amount. If your income exceeds the phase-out range, you will not qualify to make a contribution to a Roth IRA. "IRA FAQs - Contributions." The historical Roth IRA contribution limits have steady increased since the Roth IRA was first introduced in 1997. Internal Revenue Service. Be sure to pay attention to the IRS's contribution limits for the year, keep track of your contributions, and watch your income. Roth … You may know that the contribution limit for Traditional and Roth IRAs for 2019 is $6,000 (or $7,000 if you’re 50 or older). Roth IRAs also allow tax-free withdrawals of earnings on contributions after a five-year holding period under certain conditions. Roth 401(k) Contribution Limits for 2019 The maximum amount workers can contribute to a Roth 401(k) for 2019 is $19,000 if they’re younger than age 50. Unlike traditional IRAs, there are no required minimum distributions (RMDs) for Roth IRAs. You can’t contribute at all if your MAGI exceeds the limits. The IRS updated the Roth IRA income limits for contributions in 2021 (they are often adjusted annually to account for inflation). You must have taxable compensation, though. Of course, any strategy that has tax implications should be reviewed by a qualified tax professional. Those conditions include reaching age 59½, being disabled, or using the funds for first-time homebuying expenses., Of course, like other tax-advantaged retirement plans, the IRS has specific rules regarding Roth IRAs. All SEP contributions are reported during the year in which contributions are made. The Tax Cuts and Jobs Act of 2017 made some changes to the rules governing Roth IRAs. An individual retirement account (IRA) is an investing tool individuals use to earn and earmark funds for retirement savings. Internal Revenue Service. There's an annual maximum contribution of $6,000 per child, per year for 2020 and 2021. They include untaxed combat pay, military differential pay, taxed alimony, and disability benefits.. A Roth IRA is an individual retirement account under United States law that is generally not taxed upon distribution, provided certain conditions are met. Here are the limits to qualify for the Saver's Credit for the 2021 tax year: The amount of credit you get depends on your income. Take advantage of the 2020 IRA contribution limits: up to $6,000, or $7,000 if age 50 or older. It has existed since the early 2000s. On the opposite end of the spectrum, an employed person in their 70s can continue to contribute to a Roth IRA. The Roth IRA MAGI phase out ranges for 2019 are: Single filers: Up to $122,000 (to qualify for a full contribution); $122,000–$137,000 (to be eligible for a partial contribution) **Lesser of $57,000 or 25% of compensation up to compensation limit of $285,000. Like its traditional IRA cousin, this type of savings account allows your investments to grow tax-free. Accessed April 17, 2020. Accessed April 17, 2020. First, you can work for someone else who pays you. If they managed to contribute $4,000 with an income below $39,000, their tax credit would be $2,000 (50% of their contributions). Accessed Feb. 27, 2020. If you have more than one IRA (for example, a traditional and a Roth), your total combined contribution to all your accounts cannot exceed the above limits. However, making a conversion adds to MAGI, and may trigger or increase a phase-out of your Roth IRA contribution amount. "Topic No. If … There are two ways to get earned income: Work for someone else who pays you, or own or run a business or farm. Internal Revenue Service. Contributions to Roth IRAs are not deductible the year you make them: they consist of after-tax money. Individuals making over $139,000 and married couples making over $206,000 in 2020 won't be able to contribute anything directly to a Roth IRA. These accounts allow a person with earned income to contribute on behalf of their spouse, who doesn't work for pay. The limits change periodically, so check back each year to make sure you comply. Charles Schwab. Withdrawals on earnings work differently. The contribution limit for both Roth and Traditional IRAs will remain the same this year. In 2021, the Roth IRA contribution limit remains at $6,000, with a $1,000 catch-up contribution if you are 50 or over. The figures below are the amounts you can contribute, in total, across all of your Roth and traditional IRAs, including those you hold at other companies. The maximum total annual contribution for all your IRAs (Traditional and Roth) combined is: $6,000 (for 2019) and $6,000 (for 2020) if you're under age 50 $7,000 (for 2019) and $7,000 (for 2020) if you're age 50 or older The deadline to make a Traditional IRA contribution for the current tax year is typically April 15 of the following tax year. However, it also lets you take tax-free withdrawals of your contributions at any time. RMDs (Required Minimum Distribution) are not required. The Traditional and Roth contribution limit is $6,000 per individual for 2019. IRA contribution limits increased in 2019, but remain the same for 2020. Amount of your reduced Roth IRA contribution If the amount you can contribute must be reduced, figure your reduced contribution limit as follows. Internal Revenue Service (IRS). If you’re 50 or older, you can contribute an additional $1,000 (for $7,000 total) in 2019 and 2020. Accessed April 17, 2020. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Internal Revenue Service (IRS). Unlike Roth IRAs, there are no income limits with traditional IRAs. Can You Contribute to an IRA If You Don't Have a Job? A backdoor Roth IRA allows taxpayers to contribute to a Roth IRA, even if their income is higher than the IRS-approved amount for such contributions. "Traditional and Roth IRAs." "IRA FAQs - Rollovers and Roth Conversions." The IRS released its 2020 update to income and contribution limits for Roth IRAs. Many people with low to moderate incomes aren't even aware of the saver's credit, a dollar-for-dollar reduction of the taxes you owe. Taxpayers cannot make any contribution to a Roth IRA if their income exceeds the annually adjusted threshold limits. 2020 Roth IRA Income Limits and Contribution Limits. Benefits of a Roth IRA. There are still ways around the Roth IRA contribution limits. "IRA FAQs - Contributions." In addition, individuals age 50 or older may contribute an extra “catch up” contribution of $1,000. So, if you have the money and meet the income limitations, you can contribute to a 401(k) plan at work and then contribute to your own Roth IRA. Let's say that Henry and Henrietta, a married couple filing jointly, have a combined MAGI of $175,000. Internal Revenue Service (IRS). Learn more about opening a Roth IRA account. Use a Roth IRA to Avoid Paying Estate Taxes, Mistakes People Make With Roths and Their Estates, Rules for RMDs for Inherited IRA Beneficiaries, Retirement Topics - IRA Contribution Limits, Disability and the Earned Income Tax Credit, Amount of Roth IRA Contributions That You Can Make for 2020, Publication 590-A Contributions to Individual Retirement Arrangements (IRAs), Form 1040 U.S. If you participate in a workplace retirement plan, you won’t be eligible to contribute as an individual earning more than $75,000 or as a couple earning more than $124,000 … Roth IRAs offer many of the advantages of regular IRAs, but with more flexibility. 2020 Roth IRA Contribution Limits The IRS released its 2020 update to income and contribution limits for Roth IRAs. While not tax-deductible, contributions to a Roth IRA give you the opportunity to create a tax-free savings account. Roth IRA contribution limits and eligibility are based on your modified adjusted gross income (MAGI), depending on tax-filing status. Also, you must be over 18, not a full-time student, and not listed as a dependent on anyone else's tax return., The income thresholds are adjusted annually. It takes your AGI and adds back certain deductions, including:, To calculate your modified adjusted gross income, find your AGI from your tax return. Calculate your IRA contribution limit. "Amount of Roth IRA Contributions That You Can Make for 2020." Retirement savers 50 and older can contribute an extra $1,000. Other common types of income that don't count include: There is no age threshold or limit for making Roth IRA contributions. The IRS provides a detailed chart of the Saver's Credit., The tax credit percentage is calculated using IRS Form 8880.. Apply the excess to next year's contribution. The maximum total annual contribution for all your IRAs (Traditional and Roth) combined is: $6,000 (for 2019) and $6,000 (for 2020) if you're under age 50; $7,000 (for 2019) and $7,000 (for 2020) if you're age 50 or older; Income limits apply. What is the IRA contribution limit in 2021? Accessed Feb. 27, 2020. The 2020 combined annual contribution limit for Roth and traditional IRAs is $6,000 ($7,000 if you're age 50 or older)—unchanged from 2019. Investors 50 Years Old and Below — According to the IRS, investors can now contribute up to $6,000 if they’re 50 years old and below. November 6, 2019, WASHINGTON — IR-2019-179, Increase in 2020 eligibility income ranges for deductible contributions to traditional and Roth IRAs. "IRA Deduction Limits." You can't contribute $6,000 to one and $6,000 to another if you maintain both types of accounts, nor can you contribute $6,000 each to multiple Roth IRAs. If you are under 50 years old that means you can still contribute $6,000 to your IRA accounts, same as last year. The IRS sets income limits that restrict high earners. H.R.1994 - Setting Every Community Up for Retirement Enhancement Act of 2019, Amount of Roth IRA Contributions That You Can Make for 2020, Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs), Retirement Topics - IRA Contribution Limits, Rollovers of Retirement Plan and IRA Distributions, IRA FAQs - Rollovers and Roth Conversions, Retirement Savings Contributions Credit (Saver’s Credit), Form 8880: Credit for Qualified Retirement Savings Contributions, Publication 5307: Tax Reform Basics for Individuals and Families, Topic No. This year, it remains flat–no change from the bump we got in 2019. In 2020 and 2021, the Roth IRA contribution limits for most people are $6,000 or $7,000 if you're 50 or older. Accessed Feb. 27, 2020. For the 2020 tax year, you have from Jan. 1, 2020, to April 15, 2021, to contribute to an IRA. Compare options ... 2019. Opening one is easy, and there are many excellent Roth IRA providers that handle these accounts. If you've already filed your tax return, remove the excess contribution (and earnings), and file an amended tax return by the October deadline. People of all ages can also contribute to traditional IRAs. A couple must file a joint tax return for the spousal IRA to work, and the contributing partner must have enough earned income to cover both contributions. This table shows whether your contribution to a Roth IRA is affected by the amount of your modified AGI as computed for Roth IRA purpose. "Publication 590-A: Contributions to Individual Retirement Arrangements (IRAs)." A Roth IRA is an individual retirement account that offers tax-free growth and tax-free withdrawals in retirement. But there are income limits that restrict who can contribute. However, you may be eligible for a tax credit of 10% to 50% on the amount contributed to a Roth IRA. Are You Eligible To Open A Roth IRA? Maximum Contribution Amount To Roth IRA 2019. The Roth IRA was introduced as part of the Taxpayer Relief Act of 1997 The historical Roth IRA contribution limits have steady increased since the Roth IRA was first introduced in 1997. We also reference original research from other reputable publishers where appropriate. $6,000. Limits on the annual contribution to your retirement account went up for 2019. You do not have to report your Roth IRA contribution on your federal income tax return. However, it is highly advisable for you to keep track of it, along with your other tax records for each year. If your earned income for the year is less than the contribution limit, you can only contribute up to your earned income. For example, if you earned $3,000, you can contribute a maximum of $3,000. "Rollovers of Retirement Plan and IRA Distributions." If you contribute more than the IRA or Roth IRA contribution limit, the tax laws impose a 6% excise tax per year on the excess amount for each year it remains in the IRA. Depending on where you fall within the limit range, your contribution limit may be affected. It's on line 8b of the newly redesigned Form 1040. Then, use Appendix B, Worksheet 1 from IRS Publication 590-A to modify your AGI for IRA purposes., It's good to max out your IRA contributions. Although contribution and income limits come with direct contributions made to a Roth IRA, those restrictions don't apply to assets moved from other qualified retirement accounts. Single taxpayers must have incomes below $33,500. You'll pay the penalty for two years and then move on. 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