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It's contribution season, which means, IRA holders (and/or their employer in the case of an employer-sponsored plan) contribute a dollar amount into their IRA. All IRA contributions must be made by check, wire transfer, or cash. Certain requirements must be met in order to contribute to each account type. IRA contributions are discretionary, meaning that you are not required to make deposits every year. To help our readers understand contributions a bit better, we've answered the most frequently asked questions about Traditional and Roth IRA contributions below:
Q: How do I contribute to an IRA?
A: Once you have your account set up you can make your annual contribution via check, wire, or ACH along with our Deposit Coupon Form. You can also fund your account via rollover or transfer.
Q: How much can I contribute to an IRA?
A: The annual contribution limit for both a Traditional IRA and Roth IRA combined is $5,500 for 2017 and 2018, or $6,500 if you’re age 50 or older. The amount you can contribute to your Roth IRA may be limited based on your filing status and income. See Individual Retirement Account Contribution Limits for more details.
Q: Is my IRA contribution deductible on my tax return?
A: If neither you nor your spouse is covered by a retirement plan at work, your deduction is allowed in full. For contributions to a Traditional IRA, the amount you can deduct may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels. You may want to consult with a tax professional to determine if your Traditional IRA contribution is tax-deductible. Roth IRA contributions aren’t deductible.
Q: Can I contribute to a Traditional IRA or Roth IRA if I’m covered by a retirement plan at work?
A: Yes, you can contribute to a Traditional and/or Roth IRA even if you participate in an employer-sponsored retirement plan (including a SEP IRA or SIMPLE IRA plan). Participation in an employer plan only affects the deductibility of your Traditional IRA contribution.
Q: I want to set up an IRA for my spouse. How much can I contribute?
A: If you file a joint return and have taxable compensation, you and your spouse can both contribute to your own separate IRAs. The maximum contribution you may contribute for each of your IRAs will be based on the annual limit or the amount of your earned income for the year, whichever is smaller. If you file a joint return you may both use your combined income to determine the amount you can contribute.
For more information about your 2018 contributions, visit our Contribution Limits page here.