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Tax Resource Center

Contribution and Deduction Limits & Rules for IRA and CESA

Tax-deferred accounts have limits on the amount of money that can be contributed per year. In some cases the rules get very detailed and take into consideration how you file your taxes, your income, and your work status. Here’s some information about the tax ramifications of how you fund your tax-deferred accounts as well as additional deduction limits and withdrawal rules.

At Thrivent Mutual Funds, we recommend you consult your tax advisor to make sure you’re getting the most out of your investments. Thrivent Mutual Funds and their representatives cannot provide legal or tax advice.

Jump to information on:

 

Traditional IRA

Contribution and Deduction Overview

Contribution Limits

  • 2016 and 2017: Lesser of $5,500 or 100% of earned income across all your IRA accounts
  • No contributions are allowed beginning the year you reach age 70½

Catch-up Contributions

  • If you’re age 50 or older, you can increase your traditional IRA contribution to $6,500 for 2016 and 2017

Contribution Deadline

  • Typically, contributions must be made by April 15th for the previous year

Tax-Deductible Contributions

Your traditional IRA contributions may be tax-deductible, but there are several factors that may limit and disqualify you from the deduction, depending on whether you or your spouse are covered by a retirement plan at work and/or your income exceeds certain levels. You’re considered covered by an employer retirement plan if you or your spouse have:

  • A contribution plan (profit-sharing, 401(k), stock bonus, or money purchase pension)
  • An IRA-styled plan like a SEP, SARSEP, or SIMPLE IRA
  • A benefit plan (pension that pays a retirement benefit)

Income levels are determined by your Modified Adjusted Gross Income (MAGI), which is your annual adjusted gross income with certain deductions (e.g., student loan and IRA deductions) added back in.

 

Deductions if Covered by a Plan

Full deduction (up to your allowed contribution limit)

Single or head of household

  • 2016 MAGI: $61,000 or less
  • 2017 MAGI: $62,000 or less

Married (jointly) or qualified widower/widow

  • 2016 MAGI: $98,000 or less
  • 2017 MAGI: $99,000 or less

Partial deduction

Single or head of household

  • 2016 MAGI: More than $61,000 but less than $71,000
  • 2017 MAGI: More than $62,000 but less than $72,000

Married (jointly) or qualified widower/widow

  • 2016 MAGI: More than $98,000 but less than $118,000
  • 2017 MAGI: More than $99,000 but less than $119,000

Married (but file separately)

  • 2016 or 2017 MAGI: Less than $10,000

No deduction

Single or head of household

  • 2016 MAGI: $71,000 or over
  • 2017 MAGI: $72,000 or over

Married (jointly) or qualified widower/widow

  • 2016 MAGI: $118,000 or over
  • 2017 MAGI: $119,000 or over

Married (but file separately)

  • 2016 or 2017 MAGI: $10,000 or more

Deductions if Not Covered By a Plan

Full Deduction (Up to your allowed contribution limit)

If you file as single, head of household, qualifying widow/widower, married (jointly) or married (separately) with spouse not covered by work plan

  • MAGI: Any Amount

If you file as married (jointly) or separately with spouse covered by work plan

  • 2016 MAGI: $184,000 or less
  • 2017 MAGI: $186,000 or less

Partial Deduction

If you file as married (jointly) or separately with spouse covered by work plan

  • 2016 MAGI: More than $184,000 but less than $194,000
  • 2017 MAGI: More than $186,000 but less than $196,000

No Deduction

If you file as married (jointly) or separately with spouse covered by work plan

  • 2016 MAGI: $194,000 or more
  • 2017 MAGI: $196,000 or more

 

Roth IRA

Contribution and Deduction Overview

Contribution Limits

  • 2016 and 2017: Lesser of $5,500 or 100% of earned income across all your IRA accounts 

Catch-up Contributions

  • If you’re age 50 or older, you may be able to increase your Roth IRA contribution to $6,500 for 2016 and 2017, based on MAGI limits

Contribution Deadline

  • Typically, contributions must be made by April 15th for the previous year

Tax-Deductible Contributions

  • Contributions for Roth IRA don’t qualify for tax deductions.

Contribution Limits

Full contribution

If you file as single, head of household, or married (filing separately) and didn’t live with your spouse at all during the year: 

  • 2016 MAGI: Less than $117,000
  • 2017 MAGI: Less than $118,000

If you file as married (jointly) or a qualifying widower or widow:

  • 2016 MAGI: Less than $184,000
  • 2017 MAGI: Less than $186,000

 

Reduced contribution

If you file as single, head of household, or married (filing separately) and didn’t live with your spouse at all during the year:

  • 2016 MAGI: Equal to or greater than $117,000 but less than $132,000
  • 2017 MAGI: Equal to or greater than $118,000 but less than  $133,000

If you file as married (jointly) or a qualifying widower or widow:

  • 2016 MAGI: Equal to or greater than $184,000 but less than $194,000
  • 2017 MAGI: Equal to or greater than $186,000 but less than $196,000

If you file as married (filing separately) and lived with your spouse at any time during the year:

  • 2016 or 2017 MAGI: Less than $10,000

No contribution

If you file as single, head of household, or married (filing separately) and didn’t live with your spouse at all during the year:

  • 2016 MAGI: $132,000 or over
  • 2017 MAGI: $133,000 or over

If you file as married (jointly) or a qualifying widower or widow:

  • 2016 MAGI: $194,000 or over
  • 2017 MAGI: $196,000 or over

If you file as married (filing separately) and lived with your spouse at any time during the year:

  • 2016 or 2017 MAGI: $10,000 or more

 

Coverdell Education Savings Account (ESA)

Contribution and Deduction Overview

Contribution Limits

  • Limit of $2,000 per year, per student total from all contributors (across any/all eductional savings accounts held) 
  • Contributions can be made by the student, parents, or any other individual or organization
  • An individual's contributions for a student may have certain limitations based on the contributor's MAGI (see below)
  • You do not need earned income in order to make a contribution

Contribution Deadline

  • Typically, contributions must be made by April 15th for the previous year.

Deductions

  • ESA contributions aren’t deductible.

Contribution Limits

Full contribution

If contributor files as single

  • MAGI: $95,000 or less

If contributor files as married

  • MAGI: $190,000 or less

Partial contribution

If contributor files as single

  • MAGI: $95,001 to $110,000

If contributor files as married

  • MAGI: $190,001 to $220,000

No contribution

If contributor files as single

  • MAGI: More than $110,000

If contributor files as married

  • MAGI: More than $220,000