How much can I contribute to an IRA?

For the 2024 and 2025 tax years, you can contribute up to $7,000 (or up to $8,000 for those age 50 or older by year end). For each year, you have until the federal tax deadline to make IRA contributions, which could reduce taxes on your previous year’s returns.

Note that contribution limits are the total you can contribute across all your traditional and Roth IRA accounts. And the amount you can contribute to a Roth IRA may be less, depending on your earned income, as the Roth IRA contribution limit is reduced if your modified adjusted gross income (MAGI) exceeds thresholds.

Can my spouse contribute?

Even if your spouse doesn’t work, he or she can contribute to a spousal Roth or traditional IRA if you are a wage-earner and you are married, filing jointly. However, there are limitations.

• You can’t contribute more than you earn in taxable compensation.
• In 2024 and 2025, in addition to your IRA contribution, your spouse may also contribute up to $7,000 for those under age 50 and $8,000 for those 50 and older to their spousal traditional IRA.

Are there age restrictions?

Working individuals may continue to contribute to their traditional or Roth IRAs for as long as they have earned income without age restrictions. This represents a change in the tax law as part of the SECURE Act of 2020.

Are there upper income restrictions?

There are no upper income restrictions on contributing to a traditional IRA, although there are income restrictions for taking a deduction for your IRA contribution if you or your spouse are participating in an employer plan at work, such as a 401(k).

Limitations to qualify for a deduction on your traditional IRA contributions

Married filing jointly, with a workplace plan: For 2024, phase out starts at $123,000 with no deduction at $143,000 and above. For 2025, phase out starts at $126,000 with no deduction at $146,000 and above.

Married, filing jointly, without a workplace plan (but your spouse participates in a plan): For 2024, phase out starts at $230,000 with no deduction at $240,000. For 2025, phase out starts at $236,000 with no deduction at $246,000.

Single and head of household, covered by a workplace plan: For 2024, phase out starts at $77,000 with no deduction at $87,000. For 2025, phase out starts at $79,000 with no deduction at $89,000.

Married, filing separately, if covered by a workplace plan: The phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

If you make deductible traditional IRA contributions and request a qualified charitable distribution (QCD), the QCD amount will be reduced by the amount of the traditional IRA deductions.

What are taxes and penalties for early withdrawal?

All pre-tax contributions and earnings you withdraw from your traditional IRA are taxable. If you are under age 59½ you may also have to pay a 10% tax for early withdrawals unless you qualify for an exception.

Roth IRA contributions

If you earn above the income restrictions and you still want to contribute to an IRA, opening a Roth IRA may be a better option than a traditional IRA if you meet the Roth IRA income limits.

To qualify for the full contribution, those who are married and filing jointly must have a MAGI under $230,000 for 2024 and $236,000 for 2025. Contributions would be reduced on a sliding scale between $230,000 and $240,000 for 2024 and between $236,000 and $246,000 for 2025.

The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

Single filers must have a MAGI under $146,000 for 2024 and under $150,000 in 2025. Contributions would be reduced on a sliding scale between $146,000 and $161,000 for 2024. And between $150,000 and $165,000 for 2025.

Although a Roth IRA wouldn’t provide a tax benefit for the current year, any investment growth would be tax-deferred and you would have the benefit of tax-free qualified withdrawals later, whereas traditional IRA withdrawals are taxed.

You can take tax-free withdrawals of the total amount of your contributions to your Roth IRA at any time. But for investment earnings within a Roth IRA, tax-free withdrawals must normally be taken after age 59½ and after a five-year holding period from your initial investment. Other qualified tax-free withdrawals include a first-time home purchase (up to $10,000), disability or pay-outs to a beneficiary. If you take non-qualified withdrawals, earnings will be taxable but not subject to the 10% early withdrawal penalty if taken for qualified education expenses, birth or adoption expenses ($5,000 limit), unemployed health insurance premiums and payments through a substantially equal periodic payments plan (SEPP).

The following tables lay out the income limitations for your eligibility for contributing to a Roth IRA.