# @thejoserafaelhernandez on Instagram

- **Type:** Image
- **Original URL:** https://www.instagram.com/p/C__NllCS25Q
- **Gondola URL:** https://gondola.cc/posts/59827298-thejoserafaelhernandez-instagram
- **Thumbnail:** https://img.gondola.cc/tr:w-,h-,fo-auto/postThumbnails/5e8cc152b9.jpg
- **Posted:** 2024-09-16T18:14:11.000+00:00
- **Account Owner:** Jose Hernandez (@thejoserafaelhernandez) — https://gondola.cc/thejoserafaelhernandez

## Caption

What exactly does it mean to “make too much money for a Roth IRA”? 👇🏼
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In short, there are 2 things that determine your ability to contribute (add new $) to a Roth IRA:
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1) Your filing status (how you file your taxes)
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2) Your income (Modified Adjusted Gross Income to be specific)
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The IRS releases “income ranges” that determine how much $ you’re able to contribute to a Roth IRA every year depending on those 2 things I just listed 
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If your income is UNDER the ranges, you can max out your Roth IRA the “regular way” without any issue
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If your income is WITHIN the ranges, you can only contribute a reduced amount to your Roth IRA the “regular way”
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If your income is ABOVE the ranges, you’re “phased out” (blocked) from being able to contribute $ to a Roth IRA the “regular way”
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If you’re “blocked” based off of your income and still contribute to the Roth IRA normally, a 6% penalty can apply until you remove the $ from the account 
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This is where the “Backdoor Roth” can come into play
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It’s essentially a “workaround” that allows you to still fund your Roth IRA to build tax free wealth even though your income is over the limits 
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The Backdoor Roth can be a smart play but you want to make sure you go about it correctly to avoid any unnecessary tax implications and also keep accurate records for down the road 
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If you found this post helpful, give it a ❤️
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And feel free to share it with a friend that might also find it helpful 🤝
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#investing #stockmarket #indexfunds #rothira #compoundinterest

## Stats

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## Tags

stockmarket, indexfunds, compoundinterest, investing, rothira

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