IRA regular contributions: Eligibility, limits, and deductibility

Example

Jane, age 42 and single, had compensation and MAGI of $60,000 in 2024. Because her income in 2024 was less than $146,000, Jane may make a full Roth IRA regular contribution for 2024 by April 15, 2025. Assuming Jane’s MAGI remains below $150,000 for 2025, she can make a full Roth IRA regular contribution for 2025.

Example

Alex and Sherry, ages 52 and 47, respectively, are married, had compensation and MAGI of $148,000 in 2024, and will file a joint federal income tax return for 2024. Because their 2024 joint MAGI was less than $230,000, both Alex and Sherry can make a full Roth IRA regular contribution for 2024 by April 15, 2025. Assuming their MAGI remains below $236,000 for 2025, they can also each make a full Roth IRA regular contribution for 2025.

Traditional and Roth IRA regular contribution limits

The following chart shows the 2024 and 2025 traditional and Roth IRA regular contribution limits.

An individual may choose to deposit an amount up to his/her regular contribution limit to either a traditional IRA or a Roth IRA, or he/she may split the regular contribution limit amount between a traditional and Roth IRA. If making a regular contribution to both a traditional and a Roth IRA, the total amount contributed cannot exceed the contribution limit.

Example continued

Jane, from an earlier example, is age 42, single, and had compensation and MAGI of $60,000 in 2024. Jane’s 2024 traditional and Roth IRA regular contribution limit (in aggregate) for 2024 is $7,000. Assuming Jane has compensation for 2025, her traditional and Roth IRA regular contribution limit (in aggregate) is again $7,000.

Example continued

Alex and Sherry, from an earlier example, are ages 52 and 47, respectively, are married, had compensation and MAGI of $148,000 in 2024, and will file a joint federal income tax return for 2024. Alex’s 2024 traditional and Roth IRA regular contribution limit (in aggregate) is $8,000 and Sherry’s 2024 traditional and Roth IRA regular contribution limit (in aggregate) is $7,000. Assuming Alex and Sherry have the same compensation and MAGI for 2025, Alex’s traditional and Roth IRA regular contribution limit (in aggregate) is again $8,000 and Sherry’s traditional and Roth IRA regular contribution limit (in aggregate) is again $7,000.

Traditional IRA deductibility thresholds

An individual is eligible to make a traditional IRA regular contribution if he/she has compensation, however, such contributions may or may not be deductible. Individuals that are active participants in certain employer plans and whose MAGI is too much will be restricted from taking a deduction for a traditional IRA regular contribution. These MAGI limits are subject to an annual COLA and are as follows for 2024 and 2025:

Example

Continuing with an earlier example, Jane is age 42, single, had compensation and MAGI of $60,000 for 2024, and was an active participant in her employer’s 401(k) plan. Jane meets the eligibility requirements to make a traditional IRA regular contribution, and because her 2024 MAGI was less than $77,000, she is eligible to fully deduct such contribution for 2024. Jane is also eligible to make a Roth IRA contribution. So, preferably with the guidance of a tax professional, Jane may choose to make either a deductible traditional IRA contribution, a Roth IRA contribution which is not deductible, or may split her contribution between the two IRA types. Only the portion she contributes to the traditional IRA is eligible to be deducted.

Example

Continuing with an earlier example, Alex and Sherry, ages 52 and 47 respectively, are married and had compensation and MAGI of $148,000 in 2024. During 2024, Alex participated in an employer-sponsored retirement plan and Sherry did not. Since their 2024 MAGI was more than $143,000 any traditional IRA regular contribution made by Alex will not be deductible. However, Sherry was married to an active participant but was not an active participant herself, and any traditional IRA contribution she makes is eligible to be deducted since their MAGI was below $230,000. So, with the guidance of a tax professional, Alex may decide to contribute to a Roth IRA for 2024. Sherry may choose to either make a traditional IRA deductible contribution, forego the deduction and make a Roth IRA contribution for 2024, or make a regular contribution to each IRA type for 2024, considering her contributions, in aggregate, do not exceed $7,000.

IRA contribution deadline

The IRA regular contribution deadline is an individual’s tax-filing deadline, excluding extensions (generally, April 15 following the year for which the contribution is made).

When accepting regular contributions between January 1 and an individual’s tax-filing deadline, it’s always important to ask which tax year (i.e., previous or current) the regular contribution is intended for, and to document it properly.

Making contributions for both previous year and current year

Occasionally, IRA owners make contributions for both the previous and current year at the same time. This generally can only occur between January 1 and April 15.

Example

Jane from an earlier example, is age 42, single, and had compensation and MAGI of $60,000 for 2024. Jane has decided to contribute to a traditional IRA. On March 12, 2025, Jane decided to make both her 2024 and 2025 contributions, and subsequently wrote a check to ABC Bank for $14,000. ABC Bank documents a $7,000 contribution for 2024 to her traditional IRA, and separately documents a $7,000 contribution for 2025 to the same traditional IRA. Jane will deduct her 2024 $7,000 traditional IRA regular contribution on her 2024 federal income tax return. Assuming Jane’s MAGI is below $79,000 in 2025, she will again qualify to deduct her entire 2025 traditional IRA regular contribution on her 2025 federal income tax return.

Conclusion

An IRA owner, not an IRA custodian/trustee, is responsible for determining his/her regular IRA contribution eligibility, whether he/she can deduct all or a portion of a traditional IRA regular contribution, or the amount of the Roth IRA regular contribution he/she is eligible to contribute. Although an IRA custodian/trustee can assist individuals by educating them on IRA rules, IRA owners should make their IRA decisions with the guidance of his/her tax or legal professional.

For an opportunity to learn more about IRAs and other tax-advantaged accounts including Health Savings Accounts and Coverdell Education Savings Accounts, consider the Wolters Kluwer IRA Library Electronic Book (IRA E-Book) or our On-Demand Video Training offered on a variety of topics. Go here to learn more about training opportunities available to you, or you can call us at 1-800-552-9408.