Traditional IRA Contributions

Benefits of Traditional IRA Contributions

Traditional IRAs allow you to deduct up to your full contribution amount from your income for tax purposes. For instance, if you earn $50,000 but also make a $5,000 contribution to your Traditional IRA, you'll only have to pay taxes on $45,000 for the year.

Contribution Deadlines & Annual Limits

Tax Year	Annual Contribution Limit (below age 50)	Annual Contribution Limit (age 50 or above)	Contribution Deadline
2019	$6,000	$7,000	4/15/2020
2020	$6,000	$7,000	4/15/2021

Cash or assets that you transfer or roll from another qualified plan will not count against these annual limits. You can make a contribution to a new Traditional IRA for a given tax year even if you open the account in the following calendar year.

EXAMPLE: You open a Traditional IRA on February 1, 2020. You can still make 2019 contributions until April 15, 2020 even though your account was not open during the 2019 calendar year.

Other Key Considerations

You may no longer contribute to a Traditional IRA once you reach age 70½. Until that time, you must earn verifiable and taxable income to garner the tax-deferred benefits of Traditional IRA contributions. Your modified adjusted gross income (MAGI) may affect the deductibility of your contributions. The following MAGI ranges--at which your Traditional IRA contribution deductibility may be limited--apply for the 2019 tax year:

$0 - $10,000: For a married individual who files separately and receives retirement benefits through his or her employer or his/her spouse receives retirement benefits through his/her employer.
$64,000 - $74,000: For those who file their taxes as single and head of household and are covered by a retirement plan at work.
$103,000 - $123,000 (combined): For married couples who file a joint tax return and the IRA holder is covered by a retirement plan at work.
$193,000 - $203,000 (combined): For married couples who file a joint tax return and the IRA holder is NOT covered by a retirement plan at work, but the spouse IS covered by a retirement plan at work.

The following MAGI ranges at which your Traditional IRA contribution deductibility may be limited apply for the 2020 tax year:

$0 - $10,000: For a married individual who files separately and receives retirement benefits through his or her employer or his/her spouse receives retirement benefits through his/her employer.
$64,000 - $74,000: For those who file their taxes as single and head of household and are covered by a retirement plan at work.
$104,000 - $124,000 (combined): For married couples who file a joint tax return and the IRA holder is covered by a retirement plan at work.
$196,000 - $206,000 (combined): For married couples who file a joint tax return and the IRA holder is NOT covered by a retirement plan at work, but the spouse IS covered by a retirement plan at work.

Consult with your accountant or tax professional for more information about how your MAGI may affect your Traditional IRA contributions.