Dana,age 31 and unmarried,is an active participant in a qualified retirement plan.Her AGI is $116,000.What amount,if any,may Dana contribute to a Roth IRA in 2013?

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The maximum contribution to a Roth IRA in 2013 is $5,500 for individuals under age 50. However, there are income limitations for contributing to a Roth IRA. For a single taxpayer, the ability to make a full contribution begins to phase out at an AGI of $112,000 and is completely phased out at an AGI of $127,000. Since Dana's AGI is $116,000, her contribution limit is reduced. The reduction is calculated by taking the excess of her AGI over $112,000 and dividing it by $15,000. That figure is then multiplied by the maximum contribution limit of $5,500. In this case, the reduction is ($116,000-$112,000)/$15,000 = 0.27. Multiplying that by $5,500 gives a reduction of $1,485. Therefore, Dana can contribute up to $5,500 - $1,485 = $4,015 to a Roth IRA in 2013. However, since contributions must be made by April 15 of the following year, it's also possible that her AGI could be lower in 2014, which might increase her contribution limit.

Dana,age 31 and Unmarried,is an Active Participant in a Qualified