Roth Ira Rules

If you wish to open a Roth IRA, there are a couple of restrictions and rules that are currently in place. You will first have to have an minimum initial investment of at least $1000 without an automatic investment program. If you have signed up for an automatic investment program, the minimum required investment is $500.

People opening a Roth IRA must make under $105,000 if filing as single. For couples that are married and filing jointly, the income limit is up to $166,000 to quality for a full contribution. There is no age limitation to opening a Roth IRA account, teenagers can open their own account if they wish. The only requirement is that they fund the Roth IRA with earned income.

Also, there is also a minimum earned income requirement in order to be eligible for opening a Roth IRA. Contributions to the Roth IRA are limited based on the taxable compensation, not income earned from investments. A person's adjusted gross income determines the amount that they can contribute to the account.

No contribution is allowed once an individual has reached the top of this income range. The maximum amount a person is allowed to make every year is $120,000, according to Roth IRA rules. In 2010, many of these restrictions will be removed.

With the new 2010 Roth IRA rules, there is a much better opportunity to open a Roth IRA account. Taxpayers making with an adjusted gross income of over $100,000 will be able to cash into this opportunity, as income limits have been removed. The phase-out contribution limits have also been removed, allowing people opening an account to make more contributions, even if they have an adjusted gross income of over $100,000.

For people who currently have a Roth IRA, this restriction will not be removed, but the limits will be increased. Since so many limits have been removed, people looking to open a Roth IRA should cash in on this offer.