By Ian Berger, JD
I am 72 years old and have a Roth IRA. I have some extra cash in a bank account. Can I put that into my Roth IRA and how much can I contribute for 2021?
You could potentially contribute up to $7,000 to a Roth IRA this year, but there are a few strings attached. First, you must have 2021 earned income (pay from work or self-employment) of at least as much as the amount you contribute. (If you don’t have enough earned income but you’re married, your spouse could make a Roth IRA contribution for you if the spouse has enough earned income to cover both your Roth IRA contribution and the spouse’s contribution)
Second, you can’t make any Roth IRA contribution if your modified adjusted gross income (MAGI) exceeds a certain amount. For 2021, the limit for single individuals is $140,000 and for married individuals filing jointly is $208,000. You could make a partial contribution if your MAGI doesn’t exceed $125,000 (if single) or $198,000 (if married filing jointly). If your MAGI exceeds those limits, you could make a nondeductible traditional IRA (assuming you have enough earned income) and convert it to a Roth IRA using the “Backdoor Roth IRA” strategy.
Can you do a Qualified Charitable Distribution (QCD) to a donor advised fund?
Unfortunately, no. QCDs can only be made directly to a charity and not to donor advised funds or private grant making foundations.