# How to Calculate Your Roth Contribution Phase-Out and What To Do With It

The Roth IRA contribution phaseout range is currently a \$10,000 range. So to calculate your reduced Roth IRA contribution limit, you first calculate the percentage of the way you are through the \$10,000 phaseout range and then multiply that percentage times the original Roth IRA contribution limit.

The easiest way to do this math is to use the provided worksheets. In Publication 590-A , Worksheet 2-1 calculates your Roth MAGI and then Worksheet 2-2 steps you through the math of the Roth IRA contribution phaseout.

For more information about the Worksheet 2-1, you can either look at the worksheet directly in Publication 590-A or you can read our “Do Large Roth Conversions Require Backdoor Roth Contributions?

Here is the publication’s current version (tax year 2019) of Worksheet 2-2:

Worksheet 2-2. Determining Your Reduced Roth IRA Contribution Limit

Before using this worksheet, check Table 2-1 to determine whether or not your Roth IRA contribution limit is reduced. If it is, use this worksheet to determine how much it is reduced.

 1 Enter your modified AGI for Roth IRA purposes (Worksheet 2-1, line 11) 1 _____ 2 Enter: \$193,000 if filing a joint return or qualifying widow(er), \$-0- if married filing a separate return and you lived with your spouse at any time in 2019, or \$122,000 for all others 2 _____ 3 Subtract line 2 from line 1 3 _____ 4 Enter: \$10,000 if filing a joint return or qualifying widow(er) or married filing a separate return and you lived with your spouse at any time during the year, or \$15,000 for all others 4 _____ 5 Divide line 3 by line 4 and enter the result as a decimal (rounded to at least three places). If the result is 1.000 or more, enter 1.000 5 _____ 6 Enter the lesser of: \$6,000 (\$7,000 if you are age 50 or older), or Your taxable compensation 6 _____ 7 Multiply line 5 by line 6 7 _____ 8 Subtract line 7 from line 6. Round the result up to the nearest \$10. If the result is less than \$200, enter \$200 8 _____ 9 Enter contributions for the year to other IRAs 9 _____ 10 Subtract line 9 from line 6 10 _____ 11 Enter the lesser of line 8 or line 10. This is your reduced Roth IRA contribution limit 11 _____

There are three “results” of this worksheet:

1. Line 7 is the reduction in your contribution limit,
2. Line 8 is your new Roth IRA contribution limit, and
3. Line 11 is the amount you are allowed to contribute to your Roth IRA based on your other IRA funding decisions.

For example, with an under-age-50 married filing jointly 2019 AGI of \$196,000, you are \$3,000 of the way over \$193,000 or 30% of the way through the phaseout. This means that your base Roth individual retirement account contribution limit would only be reduced by 30% * \$6,000 or \$1,800, which means you could only contribute \$6,000 – \$1,800 or \$4,200 to a Roth IRA.

Although the worksheet does not make this explicit, I believe that the reduced Roth IRA contribution limit is a per-person limit rather than a joint limit. Meaning in my example where the reduced Roth IRA contribution limit is \$4,200, you would not be allowed to contribute \$6,000 to one person’s IRA and \$2,400 to the other for a total of \$8,400, but you could contribute \$4,200 to each spouse’s IRA.

Also, the portion of the IRA contribution limit which you cannot contribute directly to your Roth IRA, you can contribute through the backdoor Roth strategy. In my example, you could each contribute \$1,800 as a nondeductible contribution to your traditional IRA through the backdoor Roth strategy while also contributing \$4,200 to your Roth IRA through a normal contribution.

You can do this because, this would make you put \$1,800 (your nondeductible contribution) on worksheet Line 9, then Line 3’s \$6,000 minus Line 9’s \$1,800 equals \$4,200 for Line 10, which creates no change on your Roth IRA contribution limit because it matches your reduced IRA contribution limit of Line 8.

When evaluating the backdoor Roth strategy, you may benefit from reading our articles “When You Should Not Do a Backdoor Roth” and “The Biggest Mistake You Can Make With Your Backdoor Roth.”

For the latest contribution limits, you can go here: Account Contribution Limits.

Photo by Elliot Fais from Pexels