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Are you feeling overwhelmed while planning for your retirement? You don’t have to! One key piece of the puzzle is knowing how much money you are allowed to put into your IRA. The IRA contribution limit changes slightly each year. Thus, staying updated helps you make the most of your tax-advantaged savings.
This guide breaks down everything in simple terms, no financial jargon. Whether you are looking into Roth IRAs, Traditional IRAs, or self-employed options like SEP and SIMPLE IRAs, it has got you covered. So, let’s begin!
What are IRA Contribution Limits?
The IRS establishes a cap on the annual contribution to your IRA accounts. Your age and the type of IRA you have determine these limits. The objective is to assist you in increasing your retirement savings while adhering to the regulations that provide tax advantages.
Before contributing, make sure you understand the account.
How Do IRA Contribution Limits Operate?
The contribution limit does not apply to each of your Traditional and Roth IRAs separately. Rather, it applies to the total amount you can contribute to all of them together. You can only make an additional $4,000 to a Traditional IRA for that year if you contribute $3,000 to a Roth IRA, and the cap is $7,000 for that year.
If you are 50 or older, you get an extra boost called a “catch-up contribution.” It’s the IRS’s way of helping you play a little savings catch-up.
IRA Contribution Limits
IRA Contribution Limits 2024
- Traditional & Roth IRA: $7,000
- Catch-Up (If you are over50): $1,000
- Total (With catch-up): $8,000
IRA Contribution Limits 2025
- Traditional & Roth IRA: $7,000 (unchanged so far)
- Catch-up (If you are over50): $1,000
- Total (With catch-up): $8,000
These numbers can change, so keep an eye on official updates later in the year.
Traditional IRA Deduction Limits: 2024 and 2025
Just because you can contribute doesn’t always mean you can deduct those contributions from your taxes. That depends on your income and whether you (or your spouse) have a retirement plan at work.
Traditional IRA Deduction Limits 2024
- Single With Workplace Plan: Deduction phases out from $77,000 to $87,000
- Married Filing Jointly, Both Covered: $123 ,000 to $143,000
- Married Filing Jointly, Only Spouse Covered: $230,000 to $240,000
Traditional IRA Deduction Limits 2025
- Single With Workplace Plan: Deduction phases out from $79,000 to $89,000
- Married Filing Jointly, Both Covered: $126,000 to $146,000
- Married Filing Jointly, Only Spouse Covered: $236,000 to $246,000
| Filing status | 2025 Full deduction if modified AGI is … | 2025 Partial deduction if modified AGI is … | 2025 No deduction if modified AGI is … | 2024 Full deduction if modified AGI is … | 2024 Partial deduction if modified AGI is … | 2024 No deduction if modified AGI is … |
|---|---|---|---|---|---|---|
| Married filing jointly and you’re covered by retirement plan at work | $126,000 or less | More than $126,000 but less than $146,000 | $146,000 or more | $123,000 or less | More than $123,000 but less than $143,000 | $143000 or more |
| Married filing jointly and your spouse is covered by a retirement plan at work | $230,000 or less | More than $236,000 but less than $246,000 | $246,000 or more | $230,000 or less | More than $230,000 but less than $240,000 | $240,000 or more |
| Single or head of household and you are covered by a retirement plan at work | $79,000 or less | More than $79,000 but less than $89,000 | $89,000 or more | $77,000 or less | More than $77,000 but less than $87,000 | $8,7000 or more |
| Married filing separately and you or your spouse is covered by a retirement plan at work | The full deduction isn’t available | Less than $10,000 | $10,000 or more | The full deduction isn’t available | Less than $10,000 | $10,000 or more |
| Single, head of household, qualifying widow(er), married filing jointly or separately and neither spouse is covered by a plan at work | – | – | – | Any amount | – | – |
Income Limits for Contribute to Roth IRA for 2024 and 2025
Roth IRAs have income limits. If you earn too much, you might not be able to contribute directly or partially.
Income Limit to Contribute to Roth IRA for 2024
- Single: Phase-out starts at $146,000 and ends at $161,000
- Married filing jointly: $230,000 to $240,000
Income Limit to Contribute to Roth IRA for 2025
- Single: Phase-out starts at $150,000 and ends at $165,000
- Married Filing Jointly: $236,000 to $246,000
| Filing status | 2025 Modified AGI | 2025 Maximum Contribution | 2024 Modified AGI |
2024 Maximum Contribution |
2023 Modified AGI |
2023 Maximum Contribution |
|---|---|---|---|---|---|---|
| Married filing jointly or qualifying widow(er) | Less than $236,000 | $7,000 ($8,000 if 50 or older) | Less than $230,000 | $7,000 ($8,000 if 50 or older) | Less than $218,000 | $6,000 ($7,000 if 50 or older) |
| $236,000 to 246,000 | Contribution is reduced | $230,000 to 240,000 | Contribution is reduced | $218,000 to $228,000 | Contribution is reduced | |
| $246,000 or more | Not eligible | $240,000 or more | Not eligible | $228,000 or more | Not eligible | |
| Single, head of household or married filing separately (if you did not live with spouse during year) | Less than $150,000 | $7,000 ($8,000 if 50 or older) | Less than $146,000 | $7,000 ($8,000 if 50 or older) | Less than $138,000 | $6,000 ($7,000 if 50 or older) |
| $150,000 to $165,000 | Contribution is reduced | $146,000 to $161,000 | Contribution is reduced | $138,000 to $153,000 | Contribution is reduced | |
| $165,000 or more | Not eligible | $161,000 or more | Not eligible | $153,000 or more | Not eligible | |
| Married filing separately (if you lived with spouse at any time during year) | Less than $10,000 | Contribution is reduced | Less than $10,000 | Contribution is reduced | Less than $10,000 | Contribution is reduced |
| $10,000 or more | Not eligible | $10,000 or more | Not eligible | $10,000 or more | Not eligible |
What is Earned Income?
IRA contributions are made with earned income, which you can get in two ways: either by working for someone or running/owning your own business. Earned income includes money from salaries, wages, commissions, tips, bonuses, and self-employment income.
Note: The IRS considers disability retirement benefits as earned income until you reach the age at which you would have received an annuity or pension if you weren’t disabled.
What is Modified AGI?
The modified adjusted gross income (MAGI) determines your eligibility for important tax benefits and whether you can make tax-deductible contributions to IRAs. This MAGI number is likely to be close to or identical to your adjusted gross income (AGI). It takes your AGI and adds back certain deductions, including
- IRA contributions and Social Security
- Half of any self-employment taxes
- Passive income or loss
- Losses from a publicly traded partnership
- Rental losses
- Qualified tuition expenses
- The exclusion of adoption expenses
- Student loan interest
- The exclusion for income from U.S. savings bonds
- Tuition and fees
SIMPLE IRA Contributions and Deadlines for the Year 2024-2025
SIMPLE IRA Employee Contribution Deadlines
Employee contributions (deferrals) are due within 7 business days after the amount is deducted from their pay.
SIMPLE IRA Employer Contribution Deadlines
Employer contributions are due by the employer’s tax return date plus extensions. For the majority of individuals, the requirement for employer contributions spanning a year necessitates that they be completed by April 15 of the subsequent year. Alternatively, if an extension has been obtained, contributions must be made by October 15.
SIMPLE IRA Employee Contribution Limits
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| Employee elective deferrals | $16,500 | $16,000 | $15,500 |
| Catch-up elective deferral contribution for age 50+ | $3,500 | $3,500 | $3,500 |
SIMPLE IRA Employer Contribution Limits
The employer can elect from two different contribution methods. The employer can either
- Match an employee’s salary reduction contributions on a dollar-for-dollar basis, up to 3% of the employee’s compensation.
OR
- Make non-elective contributions of 2% of each eligible employee’s contribution.
Lower percentage
An employer may choose to reduce the 3% matching contribution, but under a few conditions
- The limit must be at least 1%.
- The limit is reduced for not more than 2 years out of 5 years.
- The employer must notify the employees of the reduced match much in advance before the 60-day election period for the calendar year.
Non-Elective Contributions
If the employer chooses to make non-elective contributions of 2% of each eligible employee’s compensation, it must make non-elective contributions irrespective of whether or not the employee opts to make salary reduction contributions.
An employee’s compensation of up to $345,000 for 2024 and $350,000 for 2025 is considered while determining the contribution limit.
Important note: The employer can choose to make non-elective contributions of 2% over matching the contribution only if
- The employer informs the eligible employees about choosing non-elective contributions of 2% instead of matching the contribution and
- This notification is provided within a reasonable period before the 60-day election period for the calendar year.
SEP IRA Contributions and Deadlines for the Year 2024-2025
- The tax-year 2025 deadline is April 15, 2026
- Tax-year 2024 deadline is April 15, 2025
SEP IRA Contribution Limits for the Year 2024-2025
SEP IRAs work well for self-employed folks. Contributions are made only by the employer (which could be you if you’re self-employed). You have until your tax deadline (including extensions) to contribute.
| 2025 | 2024 | 2023 | |
|---|---|---|---|
Defined contribution maximum deferral (employer/employee combined) |
Up to 25% of compensation, with a maximum of $70,000 | Up to 25% of compensation, with a maximum of $69,000 | Up to 25% of compensation, with a maximum of $66,000 |
| Age 50 Catch-Up Limit | $7,500 | $7,500 | $7,500 |
HSA Contribution Deadlines for the Year 2025-2024
- Tax-year 2025 deadline is April 15, 2026
- Tax-year 2024 deadline is April 15, 2025
HSA Contribution Limits for The Year 2024-2025
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| Maximum limit self-only coverage | $4,300 | $4,150 | $3,850 |
| Maximum limit family coverage | $8,550 | $8,300 | $7,750 |
| Age 55 Catch-Up Limit (If more than 1 person in the Family Plan is over age 55, then an additional account has to be created for making catch-up contributions) |
$1,000 | $1,000 | $1,000 |
| HDHP (High Deductible Health Plan) minimum annual deductible self-only coverage | $1,650 | $1,600 | $1,500 |
| HDHP minimum annual deductible family coverage |
$3,300 | $3,200 | $3,000 |
| HDHP maximum out of pocket self-only coverage |
$8,300 | $8,050 | $7,500 |
| HDHP maximum out of pocket family coverage |
$16,600 | $16,100 | $15,000 |
ESA Contributions and Deadlines for Year 2024-2025
ESA Contribution Deadlines for 2024-2025
- The tax-year 2025 deadline is April 15, 2026
- Tax-year 2024 deadline is April 15, 2025
ESA Contribution Limits for 2024-2025
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| Per year contribution limit until the child reaches age 18 and unless the child has special needs | $2,000 | $2,000 | $2,000 |
Spousal IRA Contributions and Deadlines for the Year 2024-2025
Spousal IRA Contribution Deadlines for the Year 2024-2025 are
- The tax-year 2025 deadline is April 15, 2026
- Tax-year 2024 deadline is April 15, 2025
Spousal IRA Contribution Limits for The Year 2024-2025
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| Individual spouse contribution limit | $7,000 | $7,000 | $6,500 |
| Catch-up contribution of individual spouse for age 50 or older | $1,000 | $1,000 | $1,000 |
| Total contribution limit for married couple | $16,000 | $16,000 | $13,000 |
| Total catch-up contribution for married couples age 50 or older | $2,000 | $2,000 |
Deadlines for IRA Contributions
The IRS permits you to make contributions to your IRA for a given year until the year’s tax filing deadline, which is typically April 15 of the subsequent year.
The current deadlines for IRA contributions are as follows
- Fiscal Year 2023: April 15, 2024
- Fiscal Year 2024: April 15, 2025
Exceptions to IRA Contribution Limits
- You cannot contribute more than you earn. For example, if your taxable compensation for the year is $5,000, that’s also your IRA contribution limit.
- If you’re nonworking and your spouse makes enough money to cover the IRA contributions, you can have a spousal IRA. So, if you both are under age 50 and want to contribute the maximum to an IRA, your spouse needs to earn at least $14,000 in 2025 to cover the $7,000 annual maximum contribution for each of you.
Excess IRA contribution
An excess IRA contribution happens in these situations
- When you contribute more than the contribution limit.
- When you make an improper rollover contribution to an IRA.
- When you make a regular IRA contribution to a traditional IRA at age 70½ or older for 2019 or earlier.
Excess IRA contributions attract a tax of 6% per year for as long as the excessive amount stays in the IRA. However, the tax applied cannot exceed 6% of the combined value of all your IRAs as of the end of the tax year.
You Can Avoid Excess IRA Contributions by
Withdrawing the excess contribution (and income earned on the excess contribution) from your IRA before the April tax deadline. But, if you’ve already filed your tax return, withdraw the excess contribution (and income earned on the excess contribution) and file an amended tax return by the October deadline.
Why Does Contribution Limits Matter?
Consistently hitting your contribution limit can lead to serious long-term growth. Even if you don’t max it out every year, small amounts add up. A $7,000 annual contribution with average returns could grow into hundreds of thousands over a few decades.
The earlier you start, the more time compound interest has to work in your favor.
IRA limits are there to guide how much you can stash away each year. Understanding them helps you avoid penalties and get the most out of your retirement accounts. And if you’re unsure where to start, we’re here to help.
Reach out to Self-Directed Retirement Plans LLC today for personalized retirement support.
FAQs
What happens if you exceed the IRA contribution limit?
You might face a 6% penalty every year, and the excess stays in your account. Try to fix it before Tax Day.
Do I have to max out my IRA every year?
Not at all. Any amount helps. The important part is consistency.
Can I contribute without an earned income?
Not unless it's through a spousal IRA, where your working spouse contributes for you.
Do SEP and SIMPLE IRAs follow the same rules?
No, they have their own higher limits and rules.
Is there a penalty for early withdrawals?
Usually, yes. 10% plus taxes if you are under 59½. Some exceptions apply.
Can I still deduct Traditional IRA contributions if I have a 401(k)?
You might, depending on your income and filing status.
Can I roll over a 401(k) into an IRA?
Yes, and doing a direct rollover helps you avoid taxes and penalties.
What is the contribution deadline?
April 15 of the next year is usually your cutoff.
Can I contribute if I also have a workplace plan?
Yes, but your income may affect how much of the contribution is deductible.
What’s the difference between deductible and non-deductible contributions?
Deductible ones lower your taxable income; non-deductible ones don’t but still grow tax-deferred.
Who qualifies for IRA contributions?
Anyone with earned income (within the set income limits).
Are IRA contributions tax-deductible?
Traditional IRA: maybe. Roth IRA: no. But withdrawals can be tax-free.
Is there an age limit for contributions?
As long as you have earned income, there’s no age cap.
