The Roth IRA Annual Checklist: What to Review Each Year

A Roth IRA mostly runs itself — but a handful of decisions reward an annual once-over. Each year it’s worth confirming you’re still eligible to contribute, maxing the contribution before the deadline, deciding whether to convert, making sure the money is actually invested (not sitting in cash), reviewing your beneficiaries, and knowing which tax forms to expect. Here’s the full checklist, organized by when each item is due.

1. Confirm You’re Eligible to Contribute

Two gates control whether you can contribute directly to a Roth IRA in a given year:

• Earned income. You need taxable compensation — wages or self-employment income. Investment income, Social Security, and rental income don’t count, and your contribution can’t exceed your earned income for the year.
• Income (MAGI) limits. For 2026 the ability to contribute phases out between $153,000–$168,000 (single / head of household) and $242,000–$252,000 (married filing jointly). Above the top of the range, you can’t contribute directly.

If your income is above the limit, you’re not shut out — the backdoor Roth has no income ceiling. Use the MAGI estimator to see where you land, or the eligibility page for the reduced-contribution math.

2. Max the Contribution — and Mind the Deadline

The 2026 limit is $7,500, or $8,600 with the age-50+ catch-up ($1,100). Two timing details people miss:

• You have until the tax-filing deadline. A contribution for a given year can be made right up to that year’s filing deadline — usually April 15 of the following year. A filing extension does not extend it.
• Tell the custodian which year it’s for. From January to April a contribution defaults to the current year unless you mark it for the prior year — get this wrong and you can accidentally overshoot one year’s limit.

Married with one earner? A spousal contribution lets a couple filing jointly fund a Roth for the non-earning spouse. See the current contribution limits for the full picture.

3. Decide Whether to Convert — and Time It

A Roth conversion (moving traditional IRA money to Roth and paying the tax now) is an annual decision, not a one-time one. Unlike contributions, conversions have no income limit and no dollar limit. Worth weighing each year:

• Low-income years are the opening — a gap year, early retirement, or an otherwise low-earning year lets you convert at a lower tax rate.
• Convert by Dec 31 for it to count toward that tax year — conversions follow the calendar year, not the April contribution deadline.
• Watch the side effects — a large conversion can raise your Medicare premiums two years later (the IRMAA lookback), and a conversion can’t be undone once it’s done.

More on timing and mechanics: Roth conversions.

4. Keep It Invested — Don’t Let Cash Drag

The most common Roth IRA mistake costs nothing in fees and everything in growth: contributing, then leaving the money in the settlement fund. A contribution doesn’t automatically buy investments — you have to place the order. Once a year, check that:

• Your contribution is actually invested, not sitting as cash.
• Your allocation still matches your plan — rebalance if it has drifted.
• You’re not bleeding returns to fees — a 1% expense ratio can cost roughly 25–30% of your balance over 30 years.

5. Review Your Beneficiaries

Your beneficiary designation — not your will — controls who inherits the account, so it should be reviewed after any major life event (marriage, divorce, birth, a death in the family). It’s easy to set once and forget, and an out-of-date designation is one of the most common and costly estate-planning errors. Heirs other than a spouse generally fall under the inherited Roth IRA 10-year rule.

6. Know Which Tax Forms to Expect

For most Roth IRA holders the answer to “what do I file?” is nothing — contributions, growth, and qualified withdrawals don’t go on your return. The forms to recognize:

• Form 5498 — your custodian files it and sends you a copy in May. Informational only; you don’t attach it to anything.
• Form 8606 — file if you did a backdoor Roth (a nondeductible contribution plus a conversion).
• Form 5329 — file if you had an excess contribution (6% excise) or an early withdrawal of earnings (10% penalty).
• Form 8880 — file if your income qualifies you for the Saver’s Credit.
• Form 1099-R — your custodian issues it if you took any distribution during the year.

7. Track Your 5-Year Clocks

Two separate five-year periods affect when money comes out tax- and penalty-free: one runs from your first Roth contribution (before earnings can be withdrawn tax-free), and a separate clock starts with each conversion (before that converted amount escapes the 10% early-withdrawal penalty). If you’re approaching a withdrawal, know where your clocks stand. Full detail: the Roth IRA 5-year rules.

The Bottom Line

A Roth IRA is low-maintenance, not no-maintenance. An annual pass through this list — eligibility, contribution, conversion, investing, beneficiaries, forms, and clocks — takes a few minutes and heads off the handful of mistakes that actually cost money: missing the deadline, leaving cash uninvested, an excess contribution, or a stale beneficiary. Bookmark it and run it once a year.