Traditional IRA Limitation
Traditional individual retirement accounts typically offer tax-deferred retirement savings. However, the Internal Revenue Service limits who can participate in these accounts, as well as who can deduct the contributions made.
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Time Frame
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You cannot contribute to a traditional IRA if you will turn 70 1/2 or older during the year you wish to make the contribution. In fact, the IRS requires that you start taking out money in the year you reach 70 1/2.
Size
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Each year, the IRS sets a limit on annual contributions to a traditional IRA. As of 2010, the limit equals $5,000, but people 50 and older can contribute an extra $1,000 for a $6,000 total.
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Deductions
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If neither you nor your spouse can contribute to a retirement plan through your employer, your traditional IRA contribution can always be deducted. However, if either of you are covered, and your modified adjusted gross income exceeds the annual limits for your filing status, you cannot deduct your traditional IRA contribution from your taxable income.
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