The IRS imposes income limits that dictate how much you can contribute each year based on your modified adjusted gross income (MAGI).
Roth IRAs are funded with after-tax dollars. So, you don’t get to take a tax deduction for your contributions this year but, in return, you can withdraw the funds tax-free in retirement. This makes Roth IRAs powerful retirement savings vehicles—there aren’t many times in life you can avoid taxes—but not everyone can use a Roth. The IRS imposes income limits that dictate how much you can contribute each year based on your modified adjusted gross income (MAGI).