Here’s what HIVE AI had to say about “How do I know if I qualify for a Roth IRA or traditional IRA?”:

How to know if you qualify for a Roth IRA or a Traditional IRA

Start with compensation and contribution limits

• You need taxable compensation (wages, self-employment income, etc.) to contribute to any IRA. Total contributions across all your IRAs cannot exceed the annual IRA limit or your compensation, whichever is lower. Roth contributions are never deductible; traditional IRA contributions may be deductible, partially deductible, or nondeductible depending on your situation. 1

Qualifying for a Roth IRA

Income eligibility

• Roth IRA contributions are allowed only if your modified adjusted gross income (MAGI) is within Roth thresholds for your filing status. If your MAGI is too high, your allowed Roth contribution is reduced or eliminated. Use Publication 590‑A to compute MAGI for Roth purposes; it starts with AGI and applies specific adjustments. 2

Other key Roth rules

• Contributions are not deductible and aren’t reported on your tax return. Withdrawals can be tax‑free if they are qualified distributions. The account must be designated as a Roth IRA when opened. 3
• You can contribute for a spouse with little/no income if you file jointly and meet spousal IRA and MAGI rules. 2

Qualifying for a Traditional IRA

Eligibility to contribute

• Anyone with compensation can contribute to a traditional IRA; there’s no income ceiling to make a contribution. Traditional IRA contributions may be deductible, partially deductible, or nondeductible based on your coverage by a workplace plan and your MAGI. 4

Deductibility versus nondeductible contributions

• If you (or your spouse, if married filing jointly) are covered by a workplace plan, your deduction phases out at certain MAGI levels; above the top of the phaseout, your contribution is still permitted but not deductible. If neither spouse is covered by a workplace plan, your traditional IRA contribution is generally fully deductible. See IRS “IRA deduction limits” and Pub. 590‑A for the current MAGI thresholds and how to compute them. 1

Basis tracking for nondeductible contributions

• If any part of your traditional IRA contribution isn’t deductible, you must track basis (your after‑tax contributions) and typically file Form 8606 for the year of contribution and whenever you take distributions or convert, to ensure you don’t pay tax twice. 4

Contributions, distributions, and taxes at a glance

Traditional IRA tax treatment

• Deductible contributions and earnings are taxable when withdrawn. Early withdrawals may incur a 10% additional tax unless an exception applies. 1

Roth IRA tax treatment

• Qualified distributions are tax‑free; otherwise, some portion may be taxable and subject to the 10% early distribution tax unless an exception applies. 1

Practical steps to determine your eligibility

Step 1: Confirm compensation and the annual limit

• Verify you have taxable compensation and your intended contribution does not exceed the annual limit across all IRAs. 1

Step 2: Check coverage by a workplace plan

• Determine whether you or your spouse are covered by a retirement plan at work for the year. This affects the deductibility of traditional IRA contributions. Then compare your MAGI to the IRS deduction phaseouts. 1

Step 3: Compute MAGI for Roth purposes

• Use the Roth MAGI worksheet in Publication 590‑A to see if you can make a full, reduced, or no Roth contribution. 2

Step 4: Consider spousal IRA rules if applicable

• If filing jointly and one spouse has little/no compensation, you can contribute for that spouse within the spousal IRA and MAGI limits. 2

Step 5: Plan reporting if nondeductible

• If any part of your traditional IRA contribution is nondeductible, file Form 8606 to establish and maintain basis. 4

Conversions and “backdoor” considerations

Conversions

• You may convert traditional IRA amounts to a Roth IRA; conversions are taxable to the extent of pre‑tax amounts. If a conversion fails to qualify (e.g., due to rules in effect for the year in question), it can be treated as a taxable distribution with possible penalties and excise tax until corrected. 5

Recharacterization relief (historical/limited)

• IRS has granted case‑specific relief in rulings allowing late recharacterizations; these are not precedential but illustrate that relief may be available via 9100 relief in limited circumstances. 6

Where to get the exact thresholds and worksheets

• See IRS Pub. 590‑A and the IRS Traditional and Roth IRA pages for the current year’s contribution limit, Roth MAGI ranges, and traditional IRA deduction phaseouts, plus worksheets for MAGI and eligibility. 1 2 3

If you share your filing status, MAGI estimate, and whether you or your spouse are covered by a workplace plan, I can tell you exactly which IRA(s) you qualify for and the deductible or Roth amount for this year.

Sources

1 – IRS.gov – Traditional and Roth IRAs 📄 Summarize
2 – IRS – Publication 590-A Contributions to Individual Retirement Arrangements (IRAs) 📄 Summarize
3 – IRS.gov Tax Topics 📄 Summarize
4 – IRS – Instruction 8606 Instructions for Form 8606, Nondeductible IRAs 📄 Summarize
5 – CCA 200148051 📄 Summarize
6 – IRS Determination-201431038 📄 Summarize

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