A lot of individuals would want to open a Roth IRA account because of the benefits it offers to workers. Compared to traditional IRA accounts, Roth IRA is far more flexible. It allows individuals to withdraw their principal contributions anytime giving account holders more financial liberty. Another great thing about Roth IRA accounts is that there are no age limits with regards to the contributions. This means that no matter how old you are; whether you are more than 80 years old or below 18, you are allowed contribute to Roth IRA accounts.

However not all who wants to open a Roth IRA account are allowed to do so. Yes you got that right. There are Roth IRA rules that are made to screen those individuals who can open a Roth IRA account. These IRA rules are made to protect the system from those individuals who simply wants to take advantage of the special tax considerations given to IRA accounts.

To qualify for a Roth TRA account individuals must have a taxable income. This means that those trust fund babies and lottery winners can’t use their money to contribute to a Roth IRA account. This type of income is divided into two categories the compensation income and the alimony income. The compensation income is those that come from an employer or from products or services that are paid for. The alimony income is only applicable for married couples who want to open a joint IRA account. The amount of contributions will be based on your spouse’s income.

Lastly, there are Roth IRA income limits that will determine if the person can qualify to contribute to a Roth IRA account or not. It is formally called as the MAGI or the Modified Adjusted Gross Income. The Roth IRA income limits usually vary each year. For the year of 2011, the income limits for single filers should not be more than $107,000 for married couples who are filling jointly, their income limits is $169,000. If you exceed the income limit, the amount of your contributions may be reduced and sometimes to the point of zero.