Roth IRA & Married Filing Separately

I'm trying to figure out if there is some sort of military exception to the rule that if you are married filing separately, you can't contribute to a Roth IRA if you made more than $10,000 in a year. My husband and I both have Roth IRAs. He is not deployed so we live together in the same state. The problem is that his state of residency is our home state, whereas mine is whatever state we are currently living in. Because of this, we have to file separate state tax forms which forces us to file our federal taxes as married filing separately. We both make more than $10,000 in a year so we are unable to contribute to our Roth IRAs. Does anyone know of any exception to this rule? Thanks.

first, you are nowhere near the income where you cannot contribute to a roth (for each of you). to be clearer... based on the information you provided, you CAN contribute to roths.

secondly, who told you that you have to file married filing separately because you file different state tax returns? the fact is that you can file jointly at the federal level and also separately at state levels.

now, please understand that all of the many states have their own rules. it may be in your best interest to file separately at the federal level. many states use the federal return as the "jumping off point" in determining state income tax. further, some states may "bundle" both of your incomes and therefore treat the entire earned income as taxable to them. that said, each state will usually "credit" you the taxes the other one paid to their state.

bottom line for your initial question, you BOTH can DO roths.

If you file MFS, and your MAGI exceeds $10,000 you can not contribute to an IRA.
See IRS PUB 590, Individual Retirement Arrangements, Page 59, Table 2-1 (ROTH IRA), or Page 16 for a Traditional IRA.

Generally filing MFJ is the preferred method for the federal return.
As 1_More_Opai indicated, for some states, it is best to file MFS, and to do that at the state level, you must file MFS at the Federal Level. I believe Ohio is one such state.

While this situation stinks, one alternative may be to make contributions to an annuity with Vanguard or Fidelity or some other mutual fund organization. This wold provide you with tax deferred appreciation.