Any person who currently has earned income is eligible to open and maintain an IRA account. The amount you're eligible to contribute is based on income and age. Contributions to traditional IRAs are taken pre-tax.
Traditional Contribution Limits
You can make a contribution to your IRA for the amount of earned income you have per year, depending on your age.
- Under 50 years of age, you may contribute up to $5,500 per year.
- Between 50 and 70 ½ years of age, you may contribute up to $6,500 per year.
In the year you turn 70 ½ you will no longer be able to contribute to a traditional IRA account and you will have to start taking required minimum distributions.
Modified Adjusted Gross Income & IRA Contribution Limits
If you're covered by a retirement plan at work your deduction is phased out if your MAGI reaches a certain level.
- More than $98,000 but less than $118,000 for a married couple filing jointly or a qualifying widow(er)
- More than $61,000 but less than $71,000 for a single individual or head of household
- Less than $10,000 for a married individual filing a separate return
If your spouse is covered by a retirement plan, but you are not, your deduction is phased out based on the follwing MAGI:
- More than $183,000, but less than $193,000
The amount you can deduct adjusts on a sliding scale.
- For singles and head of household, your deduction is reduced by $500 for every $1,000 earned over the income limit
- For couples filing jointly, your deduction is reduced by $250 for every $1,000 earned over the income limit
- For couples and singles, the total of your reducted deductions can be invested in a non-deductible IRA
IRA Contribution Forms
Please visit our Forms Center for forms needed to complete your yearly IRA contributions.
This material is for informational purposes only and Scottrade is not responsible for any errors or omissions. The information is subject to change without notice and should not be construed as a recommendation or investment advice. Please consult your tax or legal advisor(s) for questions concerning your personal tax or financial situation.