MAGI limit for a Roth Ira 2025 contribution

[cornyb4]

How does that MAGI limits work for deciding if I can fund a Roth IRA 2025 contribution?   How do I calculate the MAGI, does Turbo Tax calculate that?   Does TT calculate the max Roth IRA contributions for AGI or MAGI?

[DavidD66]

TurboTax will calculate you Modified Adjusted Gross Income (MAGI) for you.  When you enter your Roth IRA contribution information in the "Deductions & Credits" section under "Retirement and Investments" the program will calculate whether you are eligible to contribute the full amount. If your income exceeds the allowable limits, TurboTax will identify the excess and inform you of the correct limit. 

Modified Adjusted Gross Income (MAGI) determines your eligibility to contribute to a Roth IRA. If your MAGI is below the phase-out range, you can contribute the full amount ($7,000, or $8,000 if age 50 or older). If your income falls within the range, your contribution limit is reduced, and if it exceeds the range, you cannot contribute directly to a Roth IRA.

The income limit to make a full Roth IRA contribution in 2025 is less than $150,000 for single filers, and less than $236,000 for those filing jointly. If you’re single, you can contribute a portion of the full amount if your MAGI is $150,000 or more, but less than $165,000. For those married filing jointly, the range to contribute a portion of the full amount is $236,000 or more, but less than $246,000. If you’re single and your MAGI is $165,000 or more, or if you are married filing joint and your MAGI is $246,000 or more, you are not eligible to contribute to a Roth IRA.  You can still make contributions to a traditional IRA.

Your MAGI is your Adjusted Gross Income (AGI) plus adjustments (additions) for certain credits, adjustments, and deductions.  The add-backs include, but aren't limited to: student loan interest deduction, foreign earned income and housing exclusions, and foreign housing deduction.  

[user17754940256]

I only received serverance compensation (not eligible to contribute) to 401K in 2025 as well as unemployment and capital gains as income. My MAGI was under $236k why does Turbotax indicate that i can't contribute to Roth IRA?

[DaveF1006]

It depends. To contribute to a Roth IRA, the IRS requires you to have taxable earned compensation that is at least equal to the amount you want to contribute. For 2025, that limit is $7,000 (or $8,000 if you are 50+).The IRS categorizes your three specific income sources as follows:

• Unemployment Benefits: Not considered compensation for IRA purposes.
• Capital Gains: Not considered compensation (this is "unearned" or investment income).
• Severance Pay: This is where it gets tricky. In most cases, severance is reported on a W-2 and is considered taxable compensation. However, some specific types of separation pay or deferred compensation may not count depending on how the employer coded it.

[user17754940256]

Please clarify why is Turbotax  software preventing me from entering amounts in the IRA section for myself.

Box 13 on the w2 is not checked for Retirement plan.

The serverance payments far exceed 20k. 

Just a little more info that I don't think is relevant.

I'm filing married joint.

The software allowed me record my wife who doesn't work was able to contribute max Roth IRA amount for herself.

[RogerD1]

I just tried a mock return using information similar to yours and was able to get a Roth IRA contribution to take for both spouses.  I did see a screen saying that my mock couple didn't qualify for an IRA deduction, but this makes total sense because a Roth IRA contribution isn't deductible on a tax return.

I don't see any reason why you shouldn't be able to make Roth IRA contributions for both of you from the information that you gave.  If you still want assistance, I recommend sending us a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

TurboTax Online:

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in the response.

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent” *
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number  (including the dash) that was generated in the response.

*(If using a MAC, go to the menu at the top of the screen, select Help, then, “Send Tax File to Agent”)