What is an IRA contribution?
Each separate deposit you make to your IRA account is called a contribution.
Who can contribute to an IRA?
This depends on the type of IRA. Here are the basic guidelines:
- Traditional IRA: Only the account owner can contribute to a Traditional IRA up to applicable limits.
- Roth IRA: Individuals and their spouses (if a joint tax return is filed) can contribute to a Roth IRA up to applicable limits. To learn more, visit IRS.gov.
How much can I contribute to my IRA?
Traditional and Roth IRAs follow the same IRS guidelines for contributions. The amount you may contribute is defined by your filing status and modified adjusted gross income (AGI). To learn more, visit IRS.gov.
What are IRA contribution limits?
Per recent IRS guidelines, your total contribution to Traditional and Roth IRAs for the given tax year cannot exceed:
- $5,500 ($6,500 if you’re age 50 or older), or
- Your taxable contribution for the year, if your compensation was less than this dollar limit
The contribution limits above reflect 2015-2016 IRA guidelines. For updated limits, visit IRS.gov.
With a Traditional IRA, you may not make contributions past the age of 70 ½. This limitation does not apply to Roth IRAs.
Are IRA contributions tax deductible?
- Traditional IRA: Contributions to a Traditional IRA may be tax deductible up to applicable amounts. Because there are limits on how much you can contribute and deduct, participation in an employer-sponsored plan might prevent you from deducting IRA contributions. How much you can contribute and deduct depends on your filing status and your income threshold. You should check IRS guidelines and speak with your financial or tax adviser to learn more.
- Roth IRA: Contributions to a Roth IRA are not tax-deductible.