IRA Accounts > Traditional IRA > Traditional IRA Contribution Limits for 2023-2024
Traditional IRA Contribution Limits for 2023-2024.
The contribution limit for a traditional IRA in 2024 is $7,000 or $8,000 for those age 50 and older.
2024 traditional IRA contribution limits.
| 2023 contribution limits* | 2024 contribution limits* | |
|---|---|---|
| Under age 50 | $6,500 | $7,000 |
| Age 50 or older | $7,500 | $8,000 |
*Contribution limits according to the IRS.
Tip: The annual IRA contribution limit applies to all your IRA accounts combined, including both Traditional and Roth IRAs.
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Eligibility criteria for traditional IRA contributions.
There are some criteria regarding income eligibility that you should be aware of as you’re getting ready to make contributions to a traditional IRA.
Contributions must be made with earned income.
The following are IRS-approved sources of earned income:
• Wages, salaries, and tips from which federal income taxes are withheld.
• Income from a job from which an employer did not withhold taxes, such as freelance work.
• Self-employed income.
Traditional IRAs have no income limit.
In other words, no matter how much money you make, you can contribute to a traditional IRA. By contrast, Roth IRAs do have income limits.
No age limit.
There is no age limit to contribute to a traditional IRA. -
2024 traditional IRA income and
tax deducibility limits.
While income doesn’t determine eligibility to contribute to a traditional IRA, it can have an impact on deductible contributions if an individual or their spouse has a retirement plan at work and their income exceeds a certain level. The chart below outlines traditional IRA contributions limits for 2024 based on filing status and whether you or your spouse are covered by an employer-sponsored retirement plan.
| Filing status | Modified adjusted gross income (MAGI) | Deduction limit |
|---|---|---|
| Single or head of household (and you are covered by an employer-sponsored retirement plan.) | $77,000 or less | Full deduction |
| More than $77,000 and less than $87,000 | Partial deduction | |
| $87,000 or more | No deduction | |
| Married filing jointly (and you are covered by an employer-sponsored retirement plan.) | $123,000 or less | Full deduction |
| More than $123,000 but less than $143,000 | Partial contribution | |
| $143,000 or more | No deduction | |
| Married filing jointly (and your spouse is covered by an employer-sponsored retirement plan.) | $230,000 or less | Full deduction |
| More than $230,000 but less than $240,000 | Partial contribution | |
| $240,000 or more | No deduction | |
| Married filing separately (and you or your spouse are covered by an employer-sponsored retirement plan.) | Less than $10,000 | Partial deduction |
| $10,000 or more | No deduction |
What Happens If You Contribute Too Much?
This error can be costly. Excess funds are taxed at 6% for each year they remain in the IRA. However, individuals can avoid this tax by withdrawing excess contributions by the due date of their individual tax return. They must also withdraw any income earned on the excess funds during that period. However you will need to report those earnings as income on your tax return. And you may have to pay a 10% penalty for early withdrawal of the earnings if you are under age 59½.
Strategies to Avoid Excess Contributions
To avoid accidentally contributing too much to your traditional IRA, find out the contribution limits for the year in question and make sure you contribute no more than that amount. It’s also important to be aware that the IRA contribution limit is a combined maximum for all the IRAs you may have, including Roth IRAs. So your contributions to a traditional IRA and a Roth IRA cannot exceed the overall yearly contribution limit, which in 2024 is $7,000 for those under age 50 and $8,000 for those 50 and older.
FAQ
Is there an income limit to contribute to a traditional IRA?
No, there is no income limit to contribute to a traditional IRA. Individuals, regardless of their income, can contribute $6,500 to a traditional IRA in 2023 (or $7,500 if they are age 50 or older), and $7,000 in 2024 (or $8,000 if they are 50 or older).
However, while income doesn’t determine eligibility to contribute to a traditional IRA, it can affect deductible contributions if you or your spouse has a retirement plan at work and your income exceeds a certain level.
Does contributing to a traditional IRA reduce taxable income?
Contributing to a traditional IRA may reduce your taxable income for the year. However, some or all of your contributions may be ineligible for tax deduction depending on your income and whether or not you or a spouse is covered by a retirement plan at work.
Can I max out a 401(k) and a traditional IRA in the same year?
Yes, you can max out a 401(k) and a traditional IRA in the same year. You can contribute up to $22,500 to a 401(k) in 2023 (or up to $30,000 for those age 50 and older), and you can also contribute up to $6,500 in a traditional IRA (or up to $7,500 for those 50 and older) in 2023.
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