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Traditional IRA & Roth IRA Contribution Limits 2017-2018

Traditional IRA Contribution Limits 2017 2018
Up to age 50 $5,500 $5,500
Catch-Up Contributions Age 50+  $1,000 $1,000
Total Contribution if Over the Age of 50  $6,500 $6,500

Roth IRA Contribution Limits MAGI Phase-Out Ranges 2017 2018
Single Individuals $118,000 - $133,000 $120,000 - $135,000
Married, Filing a Joint Tax Return  $186,000 - $196,000 $189,000 - $199,000
Married, Filing Separate Tax Returns  $0 - $10,000 $0 - $10,000

Traditional IRA Modified Adjusted Gross Income Limits 2017 2018
Single Active Participant  $62,000 - $72,000 $63,000 - $73,000
Married Active Participant, Filing Joint Tax Return $99,000 - $119,000 $101,000 - $121,000
Married Active Participant, Filing Separate Tax Returns $0 - $10,000 $0 - $10,000
Spouse of an Active Participant  $186,000 - $196,000 $189,000 - $199,000

 

Traditional & Roth IRA Contribution Deadlines 2017-2018

  • The deadline to open or contribute to a Tradtional or Roth IRA is April 17th, 2018. (no extensions)
  • The Tradtional to Roth IRA conversion deadline is December 31st, 2017. (must qualify and pay taxes personally)

 


 

Traditional IRA Contributions

The only criterion for being eligible to contribute to a Traditional IRA is sufficient earned income to make the contribution as well as the taxpayer cannot be age 70 ½ in the year of contribution. However, the best provision of a Traditional IRA - the tax-deductibility of contributions - has strict eligibility requirements based on income, filing status, and coverage of other retirement plans (e.g., 401(k), 403(b), Gov’t 457). Transactions in the account, including interest, dividends, and capital gains, are not subject to tax while still in the account, but upon withdrawal from the account, withdrawals are subject to federal income tax and possible penalties.  If you live in a state that has income tax, potential state income tax may apply as well.

Eligibility

  • Must be under the age of 70 ½ during the year of contribution and must have earned income.

Contribution and Limits

  • Contribution limits are $5,500 or 100% of compensation, whichever is less.
  • Traditional IRA contribution limit is reduced by any contribution to a Roth IRA.
  • Catch-up if age 50 or older: Additional $1,000.

Characteristics and Highlights

  • Potential tax-deductible contributions.
  • Tax-deferred earnings.
  • Pay taxes when you take distributions on taxable amounts.
  • Required minimum distributions begin at age 70 ½.
  • Amount of income determines contribution deductibility if participating in an employer-sponsored plan.

 


 

Roth IRA Contributions

A Roth IRA is an individual retirement account that is funded with post-tax dollars.  Meaning you cannot use the contribution as a tax deduction. All earnings, including interest, capital gains, and dividend income, grow tax-deferred. You pay income taxes on the initial contribution in the year that is made, which means the contribution can be distributed anytime. Earnings may be withdrawn tax-free as long as qualified distribution requirements are met. Earnings will be taxed like Traditional IRAs before the qualified distribution criteria are met. You can have both a Roth IRA and participate in an employer plans such as a 401(k), SEP, or SIMPLE as long as you meet the compensation requirements. Participating in an employer-sponsored plan does not affect eligibility to contribute to a Roth IRA.

Eligibility

  • Must have earned income and be within the income limits based on tax filing status

Contribution and Limits

  • $5,500 or 100% of compensation, whichever is less.
  • Reduced by any contribution to a Traditional IRA.
  • Catch-up if age 50 or older: Additional $1,000.

Characteristics and Highlights

  • Tax-deferred earnings.
  • Pay taxes now, pay no taxes on withdrawals when qualified status is attained.
  • Contributions may be made after age 70 ½.
  • No required minimum distributions.

 


 

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