You can contribute up to $7,500 to your IRA in the current tax year if you’re under 50, and $8,600 if you’re 50 or older. The IRS adjusts retirement account contribution limits annually to keep pace with inflation, giving you more room to build your retirement nest egg. Your income level and workplace retirement plan access determine whether you can deduct traditional IRA contributions or qualify for Roth IRA contributions.
Quick Facts About IRA Contribution Limits
| Detail | Information |
|---|---|
| Standard Contribution Limit (Under 50) | $7,500 |
| Catch-Up Contribution (50+) | Additional $1,100 |
| Total Contribution (50+) | $8,600 |
| Income Requirement | Must have earned income |
| Tax Deadline for Contributions | April 15 of following year |
| Traditional IRA Income Limits | No limits to contribute, limits apply to deductions |
| Roth IRA Income Limits | Phase-out ranges apply |
Understanding IRA Contribution Limits
The IRS sets annual limits on IRA contributions, with the standard cap at $7,500 for the current tax year, increasing from $7,000. This limit applies to the total amount you can contribute across all your traditional and Roth IRAs combined.
You can’t split this limit to contribute $7,500 to a traditional IRA and another $7,500 to a Roth IRA. The total across both account types can’t exceed the annual limit.
Your earned income also plays a role. You can only contribute as much as you earn in a given year. If you make $5,000, that’s your maximum contribution for that year, even though the limit is higher.
People age 50 and older get an advantage. The catch-up contribution limit for individuals aged 50 and over increased to $1,100, allowing a total contribution of $8,600. This extra amount helps pre-retirees accelerate their savings as retirement approaches.
Traditional IRA Phase-Out Ranges Explained
Anyone with earned income can contribute to a traditional IRA. The real question is whether you can deduct those contributions from your taxable income. This is where phase-out ranges come into play.
If neither you nor your spouse has access to a workplace retirement plan, you can deduct your full contribution regardless of income. Simple as that.
The situation changes when workplace retirement plans enter the picture. For single taxpayers covered by a workplace retirement plan, the phase-out range increased to between $81,000 and $91,000. Once your modified adjusted gross income (MAGI) hits $81,000, your deduction starts shrinking. At $91,000 or higher, you can’t deduct anything.
Married couples filing jointly face different thresholds. If the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range increased to between $129,000 and $149,000.
Here’s an often-misunderstood scenario: if you don’t have a workplace plan but your spouse does, the phase-out range increased to between $242,000 and $252,000. This “spousal IRA” rule lets non-working or lower-earning spouses contribute and potentially deduct contributions based on household income.
Even if you can’t deduct your contributions, traditional IRA contributions still grow tax-deferred until retirement. You won’t pay taxes on investment gains until you withdraw the money.
Traditional IRA Deduction Limits by Filing Status
| Filing Status | MAGI Range | Deduction Available |
|---|---|---|
| Single (with workplace plan) | $81,000 or less | Full deduction |
| Single (with workplace plan) | $81,000 – $91,000 | Partial deduction |
| Single (with workplace plan) | $91,000+ | No deduction |
| Married filing jointly (covered by plan) | $129,000 or less | Full deduction |
| Married filing jointly (covered by plan) | $129,000 – $149,000 | Partial deduction |
| Married filing jointly (covered by plan) | $149,000+ | No deduction |
| Married filing jointly (spouse has plan) | $242,000 or less | Full deduction |
| Married filing jointly (spouse has plan) | $242,000 – $252,000 | Partial deduction |
| Married filing jointly (spouse has plan) | $252,000+ | No deduction |
| Married filing separately (with workplace plan) | $0 – $10,000 | Partial deduction |
| Married filing separately (with workplace plan) | $10,000+ | No deduction |
Roth IRA Income Phase-Out Ranges
Roth IRAs work differently. You can’t deduct contributions, but qualified withdrawals in retirement come out tax-free. The catch is you need to qualify based on income.
For single taxpayers making contributions to a Roth IRA, the income phase-out range increased to between $153,000 and $168,000. Below $153,000, you can contribute the full amount. Between $153,000 and $168,000, your contribution limit gets reduced. At $168,000 or higher, you can’t contribute directly to a Roth IRA at all.
For married couples filing jointly, the income phase-out range increased to between $242,000 and $252,000. The same logic applies—full contributions below the threshold, partial contributions within the range, and no direct contributions above it.
High earners aren’t completely shut out though. The backdoor Roth IRA strategy lets you contribute to a traditional IRA (which has no income limits) and then convert it to a Roth IRA. You’ll owe taxes on the conversion, but it gets money into a Roth account.
What Is Modified Adjusted Gross Income (MAGI)?
MAGI determines your eligibility for IRA deductions and contributions. It starts with your adjusted gross income (AGI)—your total income minus above-the-line deductions like student loan interest or health savings account contributions.
For IRA purposes, you add certain items back to your AGI:
- Traditional IRA deductions
- Student loan interest deduction
- Tuition and fees deduction
- Excluded foreign income
- Interest from Series EE bonds used for education
You can find your AGI on line 11 of Form 1040. Calculate MAGI by adding back the relevant deductions listed above. Tax software typically calculates this automatically.
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Catch-Up Contributions for Savers 50 and Older
Retirement savers aged 50 and above get special treatment. The IRA catch-up contribution limit that generally applies for individuals aged 50 and over increased to $1,100.
This brings the total possible contribution to $8,600 for people in this age bracket. The extra $1,100 might not sound like much, but compound growth over 10-15 years makes it substantial.
You can make catch-up contributions throughout the entire year, not just after you turn 50. As long as you’ll be 50 by December 31 of the tax year, you qualify for the full catch-up amount starting January 1.
Can You Contribute to Both Traditional and Roth IRAs?
Yes, you can contribute to both account types in the same year. The $7,500 limit (or $8,600 if you’re 50+) applies to your combined contributions across all IRAs.
You might contribute $4,000 to a traditional IRA and $3,500 to a Roth IRA. Or any other split that totals $7,500 or less.
This strategy makes sense when:
- You want to hedge your bets on future tax rates
- Your income falls in the Roth IRA phase-out range (allowing a partial Roth contribution)
- You’re testing out Roth conversions in small amounts
- You want different tax treatment for different retirement goals
Remember that deduction rules still apply to your traditional IRA contributions based on your income and workplace plan access.
Spousal IRA Contributions
Married couples where one spouse earns little or no income can still contribute to IRAs. The working spouse’s income counts for both people’s contribution limits.
Let’s say one spouse earns $100,000 and the other earns nothing. The working spouse can contribute $7,500 to their own IRA and another $7,500 to a spousal IRA for the non-working spouse. That’s $15,000 total in retirement savings.
Both traditional and Roth IRAs work for spousal contributions. The same income phase-out rules apply based on your combined household income and filing status.
Filing separately instead of jointly ruins this benefit. Married filing separately taxpayers face extremely limited IRA deduction and contribution ranges.
What Happens If You Over-Contribute?
Contributing more than allowed creates a tax problem. The IRS treats excess contributions with a 6% tax penalty on the excess amount each year until you remove those funds.
You have until your tax filing deadline (typically April 15, plus extensions) to fix excess contributions without penalty. Contact your IRA custodian to withdraw the excess plus any earnings on that excess. The earnings get taxed as income for that year, but you avoid the 6% penalty.
If you miss the deadline, the 6% penalty applies every year until you remove the excess contribution. That penalty compounds quickly—after five years, you’ve paid 30% in penalties alone.
Stay vigilant about contribution limits, especially if you:
- Contribute to multiple IRAs at different institutions
- Make automatic contributions throughout the year
- Receive unexpected income that pushes you over Roth IRA limits
- Change jobs mid-year and forget about a contribution at your old employer
How IRA Contributions Affect Your Tax Return
Traditional IRA contributions reduce your taxable income for the year, assuming you qualify for the deduction. Contribute $7,500 and your taxable income drops by $7,500. In the 22% tax bracket, that saves $1,650 in federal taxes.
You report traditional IRA contributions on Form 1040, line 20. Your IRA custodian sends Form 5498 showing your contributions, though this arrives after tax filing season.
Roth IRA contributions don’t affect your tax return directly. You pay taxes on that income first, then contribute to the Roth. No deduction, no tax form to file for the contribution itself.
You can make IRA contributions for the previous tax year up until the tax filing deadline. Contributing in January through mid-April gives you the flexibility to maximize your previous year’s contributions while starting on the current year.
The Saver’s Credit Can Boost Your IRA Contributions
Lower and moderate-income taxpayers get an extra incentive. The income limit for the Saver’s Credit increased to $80,500 for married couples filing jointly, $60,375 for heads of household, and $40,250 for singles.
This non-refundable credit equals 10%, 20%, or 50% of your retirement contributions, up to $2,000 ($4,000 for married filing jointly). The credit percentage depends on your income level.
The Saver’s Credit works with traditional and Roth IRA contributions, plus workplace retirement plan contributions. It directly reduces your tax bill dollar-for-dollar, making it more valuable than a deduction.
You can’t claim the credit if you’re a full-time student, under 18, or claimed as a dependent on someone else’s return.
Comparing IRA Limits to 401(k) Limits
Workplace retirement plans like 401(k)s have much higher contribution limits. Individuals can contribute up to $24,500 to their 401(k) plans, significantly more than IRA limits.
The catch-up contribution for 401(k)s also dwarfs IRA catch-up amounts. The catch-up contribution limit that generally applies for employees aged 50 and over increased to $8,000, bringing total 401(k) contributions to $32,500.
Here’s the key difference: A higher catch-up contribution limit applies for employees aged 60, 61, 62 and 63, which is $11,250. This super catch-up provision specifically helps people in their early sixties who are nearing retirement.
You can contribute to both an IRA and a 401(k) in the same year. The limits don’t affect each other. Having a 401(k) does impact whether you can deduct traditional IRA contributions, based on the phase-out ranges discussed earlier.
SIMPLE IRA Contribution Limits
Small businesses often offer SIMPLE IRAs instead of traditional 401(k) plans. Individuals can generally contribute $17,000 to their SIMPLE retirement accounts, increased from $16,500.
The catch-up contribution for SIMPLE IRAs aged 50 and older is increased to $4,000, up from $3,500. Like 401(k)s, SIMPLE IRAs now have a special catch-up for ages 60-63: This higher catch-up contribution limit is $5,250.
SIMPLE IRAs count separately from traditional and Roth IRA limits. You can max out a SIMPLE IRA at work and still contribute $7,500 to a traditional or Roth IRA
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Strategic IRA Contribution Timing
When you contribute matters almost as much as how much. Contributing early in the year gives your money more time to grow. A January contribution gets 15+ months more growth than an April contribution for the previous tax year.
Dollar-cost averaging works well with monthly IRA contributions. Set up automatic transfers to contribute throughout the year. This strategy smooths out market volatility and prevents you from trying to time the market.
Some people prefer waiting until tax season to see their full financial picture. You’ll know your exact income, deduction eligibility, and whether a traditional or Roth IRA makes more sense. The tradeoff is less time for investment growth.
You can contribute to an IRA for the previous year right up until the tax filing deadline (without extensions). This gives you January through mid-April to make contributions that count for the prior tax year. Max out the previous year first, then start on the current year.
Should You Contribute to a Traditional or Roth IRA?
Your current tax bracket versus your expected retirement tax bracket drives this decision. Traditional IRAs make sense when you expect lower tax rates in retirement. The upfront deduction saves you money at today’s higher rate.
Roth IRAs shine when you expect higher tax rates later. You pay taxes now at a lower rate and enjoy tax-free withdrawals later. Young workers in low tax brackets benefit most from Roth contributions.
Consider these factors:
- Current income and tax bracket
- Expected retirement income and tax bracket
- Years until retirement
- Eligibility for deductions (traditional IRA) or contributions (Roth IRA)
- Estate planning goals (Roth IRAs have no required minimum distributions)
You don’t have to pick just one. Split contributions between traditional and Roth IRAs to diversify your tax situation in retirement.
How to Calculate Your Maximum IRA Contribution
Start with the basic limit: $7,500 if you’re under 50, $8,600 if you’re 50 or older. Then check these factors:
Income check: Your earned income must equal or exceed your contribution. W-2 wages, self-employment income, and taxable alimony count. Investment income, Social Security benefits, and unemployment don’t count.
Phase-out check: If you’re contributing to a Roth IRA, make sure your MAGI falls below the phase-out ranges. Between $153,000-$168,000 for singles or $242,000-$252,000 for married filing jointly, use the IRS worksheet to calculate your reduced contribution limit.
Deduction check: For traditional IRA deductions, verify whether you or your spouse has a workplace retirement plan. Apply the appropriate phase-out range for your filing status.
Other contribution check: Total up contributions you’ve already made to any IRA this year. The limit applies to all your IRAs combined.
How much can you contribute to an IRA if you make over $200,000?
You can contribute the full $7,500 to a traditional IRA regardless of income. However, if you make over $200,000 and have a workplace retirement plan, you can’t deduct the contribution. For Roth IRAs, single filers making over $168,000 can’t contribute directly, while married couples filing jointly can contribute up to $252,000.
Can married couples filing separately contribute to IRAs?
Yes, but the phase-out ranges are extremely limited. For both traditional IRA deductions and Roth IRA contributions, the phase-out range runs from $0 to $10,000 in MAGI. This filing status severely restricts IRA benefits unless you live apart from your spouse for the entire year.
What counts as earned income for IRA contributions?
Earned income includes wages, salaries, tips, bonuses, commissions, and self-employment income. It also includes taxable alimony received under divorce agreements finalized before 2019. It doesn’t include investment income, rental income, pension distributions, Social Security benefits, or unemployment compensation.
When is the deadline to make IRA contributions?
You have until the tax filing deadline for the year you’re contributing, typically April 15 of the following year. Extensions for filing your tax return don’t extend the IRA contribution deadline. Mark your calendar for mid-April to avoid missing the window.
What is the backdoor Roth IRA strategy?
High earners who exceed Roth IRA income limits can use the backdoor Roth strategy. You contribute to a traditional IRA (which has no income limits), then immediately convert it to a Roth IRA. You’ll pay taxes on any gains during the conversion, but this gets money into a Roth account when direct contributions aren’t allowed.
