Can i contribute to a roth ira if i have no income?

Generally, if you don't earn any income, you can't contribute to either a traditional IRA or a Roth IRA. However, in some cases, married couples who file a joint return can make contributions to the IRA based on the taxable compensation stated in their joint return. On the contrary, you'll never be able to contribute to your IRA more than your earned income in that tax year. If you don't earn anything in a tax year, you won't be able to contribute to your Roth IRA for that year.

You can continue to maintain the account, but you won't be able to add more. Roth individual retirement plans allow you to deposit money after taxes and, when you retire, withdraw your contributions and earnings tax-free. However, just because you're interested in tax benefits doesn't mean you're eligible to contribute. It's possible to add money to a Roth IRA without income from work, but if you invest money when you don't meet the requirements, you'll have to pay a contribution penalty for overcontributing.

The only difference is that it's your spouse's income, not your own, that determines whether you qualify for a Roth IRA based on maximum income limits. Roth IRAs are similar to traditional IRAs, and the biggest difference between the two is the way they are taxed. Previously, if you converted another tax-advantaged account (Simplified Employee Pension IRA (SEP), Supplemental Employee Savings Incentive Plan (SIMPLE), Traditional IRA, 401 (k) Plan or 403 (b) Plan)) into a Roth IRA and then changed your mind, you could cancel it in the form of a requalification. In addition, transfers from one Roth IRA to another are not taken into account for the purpose of making annual contributions.

The five-year Roth IRA rule states that you can't withdraw your earnings tax-free until at least five years after you've first contributed to a Roth IRA. As long as one spouse earns enough to cover both spouses' contributions, you can fund your own IRA and spouse's account. So, if you have the money and meet income limits, you can contribute to a 401 (k) plan at work and then contribute to your own Roth IRA. Contributions to Roth IRAs are not deductible during the year they are made, but instead consist of after-tax money.

However, making a conversion increases the MAGI and may cause or increase the gradual elimination of the amount of your contribution to the Roth IRA. Roth IRAs are open to anyone earning income in a given tax year, as long as they don't earn too much or too little. For those whose earnings exceed the limits of a maximum contribution, the IRS provides a worksheet to help determine how much they can contribute to a Roth IRA. If your income is too high, you are prohibited from contributing to a Roth IRA and you can only contribute to your Roth IRA what you earn in a given year.

If your income exceeds the limit to contribute to a Roth IRA, but you want to enjoy the tax advantages it offers, consider a strategy known as a “clandestine Roth IRA.” If you're married and filing a joint return, you can still contribute to your Roth IRA if your spouse receives additional compensation.