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2013 Traditional IRA Rules And Contribution Limits

2013 IRA Earned Income and Contribution Limits

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How much can you contribute to an IRA or ROTH IRA for the 2013 calendar year?

  • $5,500 for those age 49 and under.
  • $6,500 for those age 50 and older.

The above limits are $500 more than 2012 limits. In order to make an IRA contribution you must have earned income.

Earned Income Rules and Limits For 2013 Traditional IRA Contributions

You must have earned income to make an IRA contribution. The amount of earned income you have must equal or exceed the amount of your IRA contribution.

  • If you have enough earned income, you may make an IRA contribution for a non-working spouse in addition to your own IRA contribution.

If you and/or your spouse participate in a company sponsored retirement plan, you may not be able to take a deduction for a contribution to your traditional IRA, although you could still make a non-deductible contribution. Income limitations apply to determine if you can deduct your IRA contribution. Those income limitations are listed below.

2013 Traditional IRA Contribution Rules And Limits When You Also Have A Company Sponsored Retirement Plan

If you participate in a company sponsored retirement plan, your IRA contribution may not be deductible.

  • For single filers who are covered by a company retirement plan in 2013 the deduction is phased out between $59,000 and $69,000 of modified adjusted gross income (MAGI).
     
  • For married filers if you are covered by a company retirement plan in 2013 the deduction is phased out between $95,000 and $115,000 of MAGI.
     
  • For married filers where you are covered by a company plan but your spouse is not, in 2013 the deduction for your spouse is phased out between $178,000 and $188,000 of MAGI.

What does it mean to participate in a company sponsored plan? The IRS provides a concise description in Are You Covered by an Employer's Retirement Plan?

Non Deductible IRA Contributions

Even if your IRA contribution is not deductible you can still make the contribution. It is called a non-deductible IRA contribution, and the funds inside will grow tax deferred, until such time as you take a withdrawal. Or you may be eligible to make a ROTH IRA contribution instead of a contribution to a Traditional IRA. Your total contributions to ROTH and Traditional IRAs cannot exceed the dollar limits above, meaning you could contribute to both, such as $2,000 to a Traditional IRA and $3,500 to a ROTH, but you can’t contribute the full amount to both. (IRA rollovers and transfers do not count toward the IRA contribution limit.)

See 2013 ROTH IRA Rules to see if you are eligible to make a ROTH IRA contribution.

 

Spousal IRA Contributions

You may make an IRA contribution for a non-working spouse who has no earned income, as long as you have enough earned income. This is called a spousal IRA contribution.

Traditional IRA or ROTH IRA

Not sure which is best for you? Read Traditional IRA or ROTH.

2013 IRA Contribution Deadline

You have until April 15th of 2014 to make your 2013 IRA contribution.

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