Most of the criteria that any retiree would want to get in a retirement account could be found in a Roth IRA. There is no wonder why there are a lot of people who prefer it over other retirement investments. One of the benefits of getting this type of account is its ability to allow you to withdraw your investment without having to pay a lot of fees and penalties in the form of tax. However when it come to IRA contribution rules, Roth accounts are not exempted. According to the Federal government, everyone would need to make contributions in increments of $500.

These IRA rules will only apply to those who are eligible to open and make contributions towards Roth IRA accounts. The IRS income limit is the basis for eligibility.

A $5000 contribution limit has been put in place and this is the total amount that you will be allowed to contribute to all your Roth accounts. There is an exception to this rule and this applies to those who are beyond the age of 50 and are behind their retirement savings. This has been implemented in order to allow them to add $1000 more to catch up on their retirement and allow them to prepare for their retirement that is fast approaching.

Those under the age of 50 years old are also covered by the $5000 limit. This means that you will only be allowed to make a total contribution of $5000 to all your Roth IRA accounts. The more accounts you have, the lesser the amount will be allowed for you to put towards each of them. This is applicable for one tax year. So that means if you have already put $4000 towards Roth account A, you will only be allowed to put in $1000 towards your Roth account B.

One tax year corresponds to all the days that fall between January 1 of the current tax year until April 15 of the following tax year. The money that you contribute is already taxed. This is the reason why you won’t have to pay tax again once you take your money out for retirement.

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