General Contribution Limit

• As of 2011, the maximum amount you can contribute to a Roth IRA is $5,000 if you are under age 50 and $6,000 if you are 50 or older. By extension, this means that married couples can potentially contribute up to $10,000 to their Roth IRAs if they are both under 50, and up to $12,000 if both partners are older. The IRS annually reviews the limit and has the authority to raise it if inflation increases significantly.
  
  

Compensation Income

• The IRS stipulates that your contribution cannot exceed your compensation income. Generally, compensation income is the money you earn from a job or self-employment, in addition to military differential pay, nontaxable combat pay and alimony. For example, Mary is 20 years old and earns $3,000 while working a summer job in 2011. She has no other compensation income. Even though the maximum allowable contribution for someone her age is $5,000, her personal limit is $3,000, because her compensation income was less than the limit.
  
  

Spousal IRA Contributions

• Spousal IRA contributions are an exception to the compensation income rule. If you are married and file jointly with your partner, you can contribute the maximum allowable amount to your IRA even if you earn little or no money -- provided you and your spouse's total Roth IRA contributions do not exceed your joint modified adjusted gross income (MAGI). For example, Mark is unemployed throughout 2011, but his wife, Sally, has a modified adjusted gross income of $50,000. They are both under 50 years old and file jointly. Because their joint income exceeds $10,000, both partners can make a maximum Roth IRA contribution.
  
  

Phase-Out Limits

• Each year, the IRS publishes phase-out limits for single and joint filers, as well as for married people who file separately. Phase-out limits are intended to prevent high earners from taking advantage of a Roth IRA. If you make too much money, you are simply ineligible to contribute. In 2011, for example, single filers who make less than $105,000 can make the maximum Roth IRA contribution. Single filers who make between $105,000 and $120,000 can contribute less than the limit. Those whose income exceeds $120,000 cannot contribute to a Roth IRA.