How much can I contribute?
For the 2022 tax year, you can contribute the lesser of $6,000 (or $7,000 if you’re age 50 or older by the end of the year) or your taxable compensation for the year. The maximum contribution increases to $6,500 for 2023 (or $7,500 for those 50 and over). This is the maximum amount you can contribute across all your traditional and Roth IRAs. Note that Roth contributions may be limited if your earnings exceed certain limits. See below for details.
When should I make contributions?
Contributions can be made to your IRAs at any time during the calendar year and as late as the due date for filing your tax return (which is usually on or around April 15 of the following year). (See: Saving to your IRA now could make a big difference later)
That means that even if you haven’t yet made an IRA contribution, you have until the April tax filing deadline to still make the contribution for this year. That could reduce your taxes on your previous year’s returns.
Can my spouse contribute?
Even if your spouse doesn’t work, he or she can contribute to an IRA if you’re a wage-earner. But there are limitations.
Again, you can’t contribute more than you make in taxable compensation. But if you make over $12,000 for 2022 (or $14,000 if you are both 50 or over) or over $13,000 for 2023 (or $15,000 if both are 50 or over), you may be able to contribute the full amount for each of you to a traditional IRA. In other words, for those under 50, that would come to $6,000 per spouse for a total of $12,000 for 2022 and a total of $13,000 for 2023.
However, keep in mind that you can’t contribute the maximum to a traditional IRA and still contribute to a Roth IRA. If you and your spouse contribute the maximum of $12,000 (or $14,000 if you both are age 50 or over) to traditional IRAs, you would not be able to contribute to a Roth IRA during the same tax year.
Are there age restrictions?
Working individuals may continue to contribute to their IRA for as long as they have earned income. This represents a change in the tax law as part of the SECURE Act of 2020. There are also no age restrictions for contributions to Roth IRAs.
Are there upper income restrictions?
There are no upper income limitations 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.
Limitations to qualify for a deduction on your traditional IRA contributions
Married filing jointly, with a workplace plan: For 2022, phase out starts at $109,000 with no deduction at $129,000 and above. For 2023, phase out starts at $116,000 with no deduction at $136,000 and above.
Married, filing jointly, without a workplace plan (but your spouse participates in a plan): For 2022, phase out starts at $204,000 with no deduction at $214,000 and above. For 2023, phase out starts at $218,000 with no deduction at $228,000.
Single and head of household, covered by workplace retirement plan: For 2022, phase out starts at $68,000 with no deduction at $78,000 or above. For 2023, phase out starts at $73,000 with no deduction at $83,000.
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 also request a qualified charitable distribution (QCD), the QCD amount will be reduced by the amount of the traditional IRA deductions.)
Roth IRA contributions
If you earn above these 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 income limits.
Although a Roth IRA wouldn’t provide a tax benefit for the current year, it would grow 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. 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 higher education expenses, birth or adoption expenses ($5,000 limit), medical premiums, and substantially equal periodic payments (SEPP).
For a Roth IRA, to qualify for the full contribution, single filers must have a Modified Adjusted Gross Income (MAGI) under $129,000 for the 2022 tax year and under $138,000 for 2023. Contributions would be reduced on a sliding scale between $129,000 and $144,000 for 2022 and between $138,000 and $153,000 for 2023.
Married couples filing jointly must have MAGI between $204,000 and $214,000 in 2022 and between $218,000 and $228,000 in 2023 to qualify for a Roth IRA, with contributions reduced on a sliding scale.
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.
The following table lays out the income limitations for your eligibility for contributing to a Roth IRA.