Glossary

A focused glossary of the terms you will actually encounter in Roth IRA rules, each with a short primary-source-backed definition and a pointer to the pillar article that covers the concept in depth.

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5 A B C D E F G I M N P Q R S T U

A

AGI

Adjusted Gross Income. Total income minus qualifying adjustments, such as deductible HSA or traditional IRA contributions and deductible student-loan interest. The 2025 Form 1040 calculates AGI on line 11a and carries it to line 11b. AGI is the starting point for the modified AGI calculation used for Roth IRA eligibility.

See also: MAGI Estimator

B

Basis

Amounts that are not taxed again when distributed. Traditional IRA basis can come from nondeductible contributions or after-tax amounts rolled in from a plan; Form 8606 tracks its use under the pro-rata rule. In a Roth IRA, remaining regular contributions come out first without federal income tax or the early-distribution tax. Conversion amounts are a separate layer and can have an early-distribution recapture issue.

See also: Backdoor Roth · Pro-Rata Rule

Backdoor Roth IRA

A strategy for contributing to a Roth when MAGI is above the direct-contribution phase-out. Taxpayer makes a non-deductible contribution to a traditional IRA, then converts it to a Roth IRA. The pro-rata rule under IRC §408(d)(2) governs the taxable portion of the conversion.

See also: Backdoor Roth pillar · Calculator

C

Catch-up contribution

An additional age-based contribution allowance. Eligible IRA savers who are 50 or older by year-end have a $1,100 catch-up for 2026. Certain workplace plans have a higher allowance at ages 60–63. For covered workplace-plan age-based catch-ups in 2026, the Roth requirement generally applies when the participant's 2025 wages from the sponsoring employer exceeded $150,000, not $145,000 and not household income. The statutory rule and the final regulations' applicability dates are separate. These are not Roth-only catch-up rules for personal IRAs. IRS Notice 2025-67; workplace catch-up details.

See also: Contribution Limits

Compensation (earned income)

Income the IRA rules recognize for contributions. It generally includes wages and net self-employment earnings after required adjustments, plus specified items such as nontaxable combat pay, qualifying taxable graduate/postdoctoral stipends and taxable alimony under qualifying older agreements. Investment income, pensions and ordinary rental income generally do not qualify. A joint filer may use a spouse's qualifying compensation under the spousal-IRA rule; one's own paycheck is not always required. Separate annual and Roth income limits still apply.

See also: Eligibility

Conversion

Moving eligible non-Roth retirement money to a Roth. The previously untaxed portion generally enters income in the conversion year; after-tax basis is accounted for separately. Roth IRA conversions made in the same tax year share that year's five-tax-year recapture period. Withdrawing the taxable-at-conversion portion before that period ends can trigger the 10% additional tax unless an exception, including age 59½, applies. This is separate from the qualified-distribution clock.

See also: Conversion Rules · True Cost Calculator

CPA

Certified Public Accountant. A state-licensed accounting professional. CPAs have broad representation rights before the IRS, but their specialties differ; verify the individual's current license and relevant tax experience. A credential alone does not mean that person reviewed a particular article.

CFP

Certified Financial Planner. A professional certification administered by CFP Board. Its standards require a CFP professional to act as a fiduciary when providing financial advice to a client. That means acting in the client's best interests within that advice relationship.

D

DAF: Donor-advised fund. A charitable account maintained by a sponsoring charity; the donor can recommend grants while the charity retains legal control. An eligible contribution may produce an itemized deduction, subject to the applicable limits. It does not remove a Roth conversion from AGI or automatically cancel its tax or income-based effects.

E

EDB

Eligible Designated Beneficiary. A statutory category that can permit life-expectancy payments: surviving spouse, the owner's child under 21, a qualifying disabled or chronically ill person, or an individual not more than ten years younger than the owner. Eligibility is not a permanent exemption from every ten-year deadline. For example, an owner's child using life expectancy generally continues annual payments and must empty the account by the end of the tenth year after reaching 21.

See also: Inherited Roth IRA · Type Classifier

Excess contribution

A contribution beyond the amount permitted by the IRA rules. An unresolved excess can incur an annual 6% excise tax under IRC §4973, subject to the statutory account-value cap. A timely return of the contribution, adjusted for attributable gain or loss, can avoid that tax. Other correction routes have different deadlines and consequences; an ordinary withdrawal is not automatically the same as a timely corrective return.

See also: Excess Contribution pillar

F

FTC

Foreign Tax Credit. A credit, subject to limits, for qualifying foreign income taxes. It reduces U.S. tax rather than excluding the underlying compensation from income. That differs from the foreign earned income exclusion. Using the credit does not bypass Roth IRA contribution limits or the separate Roth MAGI test.

See also: Roth IRA for Expats

FEIE

Foreign Earned Income Exclusion. The §911 exclusion for qualifying foreign earned income, including eligible wages or self-employment income. Excluded amounts do not count as IRA compensation, but are added back for the Roth MAGI calculation. Qualifying unexcluded compensation or a spouse's compensation on a joint return can still matter; the two tests are separate.

See also: Roth IRA for Expats

Five-year rule

Two different Roth IRA timing rules. The qualified-distribution clock starts January 1 of the first tax year for which a Roth IRA contribution, including a conversion, was made; merely opening an empty account does not start it. Five tax years and a qualifying event are needed for a qualified distribution. A separate clock for each conversion tax year concerns potential early-distribution tax on taxable-at-conversion amounts. Age 59½ or another applicable exception can remove that additional tax without making earnings income-tax-free.

See also: 5-Year Rule · Conversion 5-Year

Form 5329

Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts. On the 2025 form, Part III addresses traditional IRA excess contributions and Part IV addresses Roth IRA excess contributions. Part I covers early-distribution taxes and exceptions; Part IX covers missed RMDs and reasonable-cause waiver requests. Filing can be required even without a regular income-tax return. Use the correct year's form and instructions.

See also: Excess · Missed RMD

Form 8606

Nondeductible IRAs. Form 8606 records nondeductible traditional IRA contributions and applicable distributions, reports traditional-to-Roth IRA conversions, and calculates taxable amounts from specified nonqualified Roth distributions. These are not its only filing triggers. Merely carrying unused basis forward, or receiving only a qualified Roth distribution, does not by itself require the form.

See also: Backdoor Roth

G

GPC

Global Privacy Control. A browser signal recognized by California’s CPRA regulations as an opt-out of sale/sharing of personal information. RothIRAHub’s consent banner pre-declines analytics when GPC is detected unless the user overrides.

See also: Cookie Notice

I

IRC

Internal Revenue Code. Title 26 of the U.S. Code. The statutory source for Roth rules. §408A is the Roth IRA section; §219 governs contribution limits; §72(t) governs the early-distribution penalty; §401(a)(9) governs RMDs.

IRMAA

Income-Related Monthly Adjustment Amount. An income-based addition to Medicare Part B and Part D premiums. A taxable Roth conversion can increase the relevant MAGI. Premium determinations generally use a tax return from two years earlier, with exceptions and adjustment procedures. The linked tools illustrate this interaction; they are not a Medicare eligibility decision.

M

MAGI

Modified Adjusted Gross Income. AGI adjusted for a particular rule. For Roth IRA contributions, specified add-backs include excluded foreign earned income and deductible student-loan interest, while qualifying Roth conversion/rollover income is subtracted. Follow the full IRS worksheet. Roth contribution MAGI, ACA MAGI and Medicare IRMAA MAGI are not interchangeable.

See also: MAGI Estimator

Mega backdoor Roth

A workplace-plan strategy using non-Roth after-tax contributions followed by a permitted Roth conversion or rollover. It differs from an IRA backdoor Roth. The plan must support the relevant after-tax contributions and distribution or conversion features; their availability cannot be assumed. Earnings and annual-additions limits must be considered separately.

See also: Mega Backdoor pillar

N

NIA

Net Income Attributable. The gain or loss allocated to a contribution for a timely corrective return or recharacterization under Treas. Reg. §1.408-11. A loss can reduce the amount returned. Different rules apply to a late removal of an excess; do not automatically add earnings to every correction.

See also: Excess Contribution

NIIT

Net Investment Income Tax. A 3.8% federal tax on the smaller of net investment income or the excess of NIIT MAGI over the applicable threshold: $200,000 for single/head of household, $250,000 for married filing jointly/qualifying surviving spouse, or $125,000 for married filing separately. A taxable Roth conversion is not itself net investment income, but can increase MAGI and expose other investment income to the tax.

See also: Conversion Tax Implications

Non-spouse beneficiary

A beneficiary other than the deceased owner's surviving spouse. For post-2019 direct inheritances, an individual who is not an eligible designated beneficiary generally has a ten-year deadline. Traditional IRA annual payments during that period depend on whether the owner died on or after the required beginning date, not just their age. A Roth owner is treated as dying before that date: a direct ten-year-rule Roth beneficiary has no annual RMDs in years 1–9. Eligible, successor and non-individual beneficiaries require separate rules.

See also: Non-Spouse Rules

P

Pro-rata rule

The rule allocating a traditional IRA payment between untaxed money and after-tax basis. Form 8606 generally combines the taxpayer's traditional, traditional SEP and traditional SIMPLE IRAs. The calculation considers basis, year-end balances and relevant distributions/conversions; it is not just the balance in the account being converted. Roth IRAs follow separate ordering rules, not this traditional-IRA aggregation.

See also: Pro-Rata Rule pillar

Q

Qualified distribution

A Roth IRA distribution meeting both the five-tax-year requirement and a qualifying condition. The conditions are age 59½, death, qualifying disability, or qualifying first-home costs within the $10,000 lifetime limit. Qualified distributions are free of federal income tax and the early-distribution tax. A workplace designated Roth account has different rules, including no first-home qualified-distribution condition.

See also: Withdrawal Rules

R

Recharacterization

The pre-TCJA option to undo a Roth conversion. Eliminated for Roth conversions by the Tax Cuts and Jobs Act of 2017 effective for tax years after 2017. Recharacterization of contributions (between Roth and traditional) remains permitted.

See also: Conversion Rules

Revenue Procedure

An IRS statement of procedures or other administrative guidance. Annual revenue procedures publish many inflation-adjusted tax figures, but not every retirement figure appears there. For example, the 2026 IRA contribution limits are in IRS Notice 2025-67. Check the authority for the particular amount and tax year.

See also: IRS Notice & Ruling Tracker

RMD

Required Minimum Distribution. A required retirement-account withdrawal. Final T.D. 10001 specifies age 73 for traditional IRA owners born 1951–1958 and 75 for those born in 1960 or later. The 1959 cohort is reserved in that final text; the accompanying proposed rule specifies 73. Roth IRA owners have no lifetime RMDs under §408A(c)(4). Inherited Roth schedules vary: direct ten-year-rule beneficiaries have no annual RMDs in years 1–9, eligible beneficiaries using life expectancy have annual payments, and other categories can have a five-year deadline.

See also: Roth IRA RMDs

Roth IRA

An individual retirement account or annuity under IRC §408A. Regular contributions are not deductible, and qualified distributions are federally income-tax-free. A traditional IRA can hold deductible contributions, nondeductible contributions and rollovers, so its distributions are not necessarily fully taxable.

See also: Roth IRA Rules

S

Saver’s Credit

The IRC §25B nonrefundable tax credit for eligible savers. It applies to eligible retirement contributions through tax year 2026; those contributions move to the Saver’s Match rules in 2027. The Credit continues for eligible ABLE-account contributions after 2026. Nonrefundable means its usable amount cannot exceed the federal income-tax liability available for it to offset.

Saver’s Match

The IRC §6433 federal retirement contribution beginning in tax year 2027. An income-based rate of up to 50% applies to as much as $2,000 of net qualifying contributions after counted distributions, up to $1,000 per eligible person. It is not limited by income-tax liability. A Roth contribution can qualify, but direct Treasury payment needs an accepting traditional IRA or non-Roth plan portion. ABLE contributions do not qualify. A 2027 Match is claimed on Form 8880-A with the 2027 return, generally filed in 2028.

SECURE Act

Setting Every Community Up for Retirement Enhancement Act of 2019. Replaced the stretch IRA with the 10-year rule for most non-spouse beneficiaries. SECURE Act 2.0 (2022) added dozens of further changes to retirement-account rules, including Saver’s Match, Roth-only catch-ups for high earners, and reduced excise tax for missed RMDs.

See also: Congress Tracker

SEP IRA

Simplified Employee Pension. Employer-funded retirement account used mainly by self-employed taxpayers. Contributions are pre-tax (traditional) or, after SECURE 2.0 §601, optionally Roth.

See also: Roth IRA Rules

SIMPLE IRA

Savings Incentive Match Plan for Employees. A small-employer plan with employee and employer contributions; a Roth SIMPLE option is permitted. During the first two years of participation, a taxable early distribution generally faces a 25% additional tax instead of 10% unless an exception applies. That does not authorize a Roth conversion during the restricted period: transfers/rollovers to a non-SIMPLE IRA generally must wait until the two-year period ends.

See also: SIMPLE IRA Rules

Spousal IRA

The joint-return rule allowing a spouse with little or no compensation to fund their own IRA. It is not a joint account. Each spouse has an individual annual limit, and combined contributions cannot exceed the couple's qualifying compensation. A spouse with some earnings can also benefit. Roth MAGI limits or traditional IRA deduction rules apply separately.

See also: Spousal IRA

Stretch IRA

A common name for inherited-IRA life-expectancy payments. The SECURE Act limited this method for most individual beneficiaries inheriting after 2019, while eligible designated beneficiaries can still qualify. Grandfathered pre-2020 inheritances and later successor events need their own analysis; an older stretch schedule did not simply disappear in 2020.

See also: Inherited Roth IRA

T

TCJA

Tax Cuts and Jobs Act of 2017. Among other things, eliminated Roth conversion recharacterization and adjusted individual tax brackets. Many TCJA provisions were scheduled to expire after 2025, but OBBBA (P.L. 119-21, July 2025) made the individual rates and brackets permanent, so the expiration did not occur.

See also: Congress Tracker

TD

Treasury Decision. A regulation issued by the Treasury Department interpreting the Internal Revenue Code. TD 10001 (July 2024) contains the final regulations on inherited-IRA distributions under SECURE and SECURE 2.0.

See also: IRS Tracker

Treas. Reg.

Treasury Regulation. The codified form of regulations issued via Treasury Decisions. §1.408A-6 covers Roth IRA distributions; §1.408-11 governs NIA on corrective withdrawals.

U

UBTI

Unrelated Business Taxable Income. Certain business income, and potentially debt-financed income, can be taxed inside an otherwise tax-exempt IRA. Partnership interests or leveraged property can create it. The IRA trustee/custodian generally must file Form 990-T when the account has at least $1,000 of unrelated trade or business gross income; that filing threshold is not a promise that the first $1,000 of every distribution is taxable or exempt.

See also: Roth IRA Rules

5

59½

The age threshold in IRC §72(t) above which the 10% early-distribution penalty no longer applies to IRA withdrawals. Passing 59½ does not alone make Roth earnings tax-free — the account 5-year clock must also have run.

See also: Withdrawal Age

A note on authority

These short definitions introduce the subject; the linked guides explain conditions and exceptions. Primary references include Publication 590-A, Publication 590-B, Publication 560, Form 5329 instructions, Form 8606 instructions, T.D. 10001 and accompanying proposals, IRS NIIT guidance, Form 990-T instructions, and Notice 2026-48. Other references: IRS preparer credentials, CFP Board standards, California privacy guidance, IRS donor-advised fund guidance, and SSA Medicare premium guidance. Use the form and authority applicable to the tax year and transaction.