investing, then look no further than a Roth IRA. Contribution limits for Roth IRAs are established by the Internal Revenue Service, and those limits can make a big difference in the amount of money you can add to your account each year. But just how much can you contribute to a Roth IRA?

Let’s start with the basics: You can contribute up to the lesser of either 100 percent of your earned income, or $6,000 per year to your Roth IRA. That’s $6,000 annually for individuals and $12,000 for those filing jointly. An earned income includes wages, salaries, bonuses, commissions, and self-employment income. Individuals who are 50 or older can add an extra “catch up” contribution of $1,000 per year, bringing the total contribution limit to $7,000 annually.

It is important to note that if you contribute more than the allowed limit, you will be required to pay a 6 percent excise tax on the total amount that exceeds the limit. However, if you mistakenly contribute too much, you may be able to avoid the penalty by withdrawing the

Article Created by A.I.