Maximum Income for IRA Contribution
The Internal Revenue Service income limits for Individual Retirement Accounts are adjusted based on legislative changes to allow more people to contribute or continue to contribute adjusting for inflation. Several factors affect whether you are able to contribute and in some cases how much. Speak with a tax adviser to determine what the best IRA structure is for your personal tax situation.
Other People Are Reading
-
Roth or Traditional
-
There are two type of IRA structures for you to consider in 2011 that are not employer-sponsored plans. One is a traditional IRA and the other is a Roth IRA. Traditional IRAs provided a dollar-for-dollar deduction for contributions made that meet income restrictions. Those that don't meet income restrictions have a phaseout income span where you can make a partial contribution or a non-deductible contribution. Roth IRAs get no deduction but grow tax-free; these operate with a separate set of income limits. The 2011 contributions limits for both types of IRA is $5,000 annually, or $6,000 if you are over 50 years old.
Traditional No Employer
-
If you are working but not covered by an employer-sponsored plan, you have the most flexibility in contributing to a traditional IRA. Keep in mind, if your employer does offer a plan, you should explore participating in that before contributing to an IRA since employer plans allow you to defer more each year and may offer employer paid matches to your contributions -- free retirement money just for saving. Single filers can contribute to a traditional IRA without any income restrictions. Married couples filing joint returns must make less than $169,000 to make full contributions and no more than $179,000 for partially deducted contributions. Those filing separate returns only can make partially deducted contributions up to $10,000.
-
Traditional Covered at Work
-
When you are covered by an employer plan, the income limits drop. Those who file single tax returns need to make less than $56,000 to make fully deductible contributions. Making between $56,000 and $66,000 allows you to make partially deductible contributions, with no deduction for any income levels above this. You can still make a full contributions, just not deduct the entire amount. A married couple filing separate returns can only make partial deductions between zero and $10,000 of income. Filing jointly changes this dramatically, with fully deductible contributions allowed up to $90,000 in income and with partial deductions allowed up to $110,000 in annual income.
Roth Income Limits
-
To qualify for Roth contributions, it doesn't matter if you are covered by an employer's plan or not, unlike the traditional IRA. It does, however, matter if you are married filed jointly, married filing separately or single. Someone single must make less than $107,000 to make a full Roth contribution. If a single filer makes between $107,000 and $122,000, a partial contribution is allowed. Married couples filing separately cannot make a full contribution but can make partial contributions if their income is between zero and $10,000 annually. Married couples filing jointly have higher limits than single filers. Making a full contribution requires making less than $169,000 and partial contributions are allowed up to $179,000 each year.
-
