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Traditional and Roth IRA Contribution Limits and Deadlines

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Continually updated contribution limits for Traditional IRA and Roth IRA including tax years 2008, 2009, 2010, and 2011.

After discovering your contribution limits and deadlines I recommend filing your taxes with TurboTax Online – that’s what I do and I’m a small business owner.

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Follow this link for information on SEP IRA contribution limits.

2011 IRA Contribution Limits

According to the IRS, maximum IRA contributions for 2010 are the same for both a Traditional IRA and Roth IRA.  You can also split your contributions among both Roth and Traditional, but your combined contribution amounts are subject to these same limits. The limits do not apply to rollover contributions.

Under 50 years old at the end of 2011:

  • Traditional IRA contribution limits = $5,000
  • Roth IRA contribution limits = $5,000
  • Combined IRA contribution limits = $5,000

Over 50 years old as the end of 2011:

  • Traditional IRA contribution limits = $6,000
  • Roth IRA contribution limits = $6,000
  • Combined IRA contribution limits = $6,000

The limits as they pertain to you are always the smaller of the numbers given or your taxable compensation.  In other words your IRA contribution limits will be the numbers given below unless your 2011 taxable compensation was less than the number given under each circumstance.

Modified AGI rules for 2011

The IRS also says that your IRA contribution limits may be reduced depending upon your modified adjusted gross income (modified AGI).

For 2011 Roth IRA contributions this MAGI phase out range is $110,000 – $125,000 for single filers and $173,000 – $183,000 for married filing jointly.  Basically if your income falls under these amounts your IRA contribution limits will be reduced accordingly.

For 2011 Traditional IRA contributions your MAGI affects your limits on tax deductibility according to you or your spouses participation in employer retirement plans.

  • If neither you nor your spouse participate in an employer retirement plan your contributions are fully tax deductible.
  • If you participate in an employer retirement plan the MAGI phase out range is $58,000 – $68,000 for single filers and $92,000 – $112,000 for married filing jointly.
  • If only your spouse is in an employer retirement plan the MAGI phase out range is $173,000 – $183,000 for married filing jointly.

2011 IRA Contribution Deadlines are April 17th, 2012.

I recommend filing your taxes with TurboTax Online and highly recommend using either Lending Club or Betterment to house your IRA.

2010 IRA Contribution Limits

According to the IRS, maximum IRA contributions for 2010 are the same for both a Traditional IRA and Roth IRA.  You can also split your contributions among both Roth and Traditional, but your combined contribution amounts are subject to these same limits. The limits do not apply to rollover contributions.

Under 50 years old at the end of 2010:

  • Traditional IRA contribution limits = $5,000
  • Roth IRA contribution limits = $5,000
  • Combined IRA contribution limits = $5,000

Over 50 years old as the end of 2010:

  • Traditional IRA contribution limits = $6,000
  • Roth IRA contribution limits = $6,000
  • Combined IRA contribution limits = $6,000

The limits as they pertain to you are always the smaller of the numbers given or your taxable compensation.  In other words your IRA contribution limits will be the numbers given below unless your 2010 taxable compensation was less than the number given under each circumstance.

Modified AGI rules for 2010

The IRS also says that your IRA contribution limits may be reduced depending upon your modified adjusted gross income (modified AGI).

For 2010 Roth IRA contributions this MAGI phase out range is $107,000 – $122,000 for single filers and $169,000 – $179,000 for married filing jointly.  Basically if your income falls under these amounts your IRA contribution limits will be reduced accordingly.

For 2010 Traditional IRA contributions your MAGI affects your limits on tax deductibility according to you or your spouses participation in employer retirement plans.

  • If neither you nor your spouse participate in an employer retirement plan your contributions are fully tax deductible.
  • If you participate in an employer retirement plan the MAGI phase out range is $56,000 – $66,000 for single filers and $90,000 – $110,000 for married filing jointly.
  • If only your spouse is in an employer retirement plan the MAGI phase out range is $169,000 – $179,000 for married filing jointly.

2010 IRA Contribution Deadlines are April 18th, 2011.

IRA Contribution Limits for 2009

According to the IRS, maximum IRA contributions for 2009 are the same for both a Traditional IRA and Roth IRA.  You can also split your contributions among both Roth and Traditional, but your combined contribution amounts are subject to these same limits. The limits do not apply to rollover contributions.

Under 50 years old at the end of 2009:

  • Traditional IRA contribution limits = $5,000
  • Roth IRA contribution limits = $5,000
  • Combined IRA contribution limits = $5,000

Over 50 years old as the end of 2009:

  • Traditional IRA contribution limits = $6,000
  • Roth IRA contribution limits = $6,000
  • Combined IRA contribution limits = $6,000

The limits as they pertain to you are always the smaller of the numbers given or your taxable compensation.  In other words your IRA contribution limits will be the numbers given below unless your 2009 taxable compensation was less than the number given under each circumstance.

Modified AGI rules for 2009

The IRS also says that your IRA contribution limits may be reduced depending upon your modified adjusted gross income (modified AGI).

For 2009 Roth IRA contributions this MAGI phase out range is $105,000 – $120,000 for single filers and $167,000 – $177,000 for married filing jointly.  Basically if your income falls under these amounts your IRA contribution limits will be reduced accordingly.

For 2009 Traditional IRA contributions your MAGI affects your limits on tax deductibility according to you or your spouses participation in employer retirement plans.

  • If neither you nor your spouse participate in an employer retirement plan your contributions are fully tax deductible.
  • If you participate in an employer retirement plan the MAGI phase out range is $56,000 – $66,000 for single filers and $89,000 – $109,000 for married filing jointly.
  • If only your spouse is in an employer retirement plan the MAGI phase out range is $167,000 – $177,000 for married filing jointly.

2009 IRA Contribution Deadlines are April 15th, 2010.

IRA Contribution Limits for 2008

According to the IRS, maximum IRA contributions for 2008 are the same for both a Traditional IRA and Roth IRA.  You can also split your contributions among both Roth and Traditional, but your combined contribution amounts are subject to these same limits. The limits do not apply to rollover contributions.

Under 50 years old at the end of 2008:

  • Traditional IRA contribution limits = $5,000
  • Roth IRA contribution limits = $5,000
  • Combined IRA contribution limits = $5,000

Over 50 years old as the end of 2008:

  • Traditional IRA contribution limits = $6,000
  • Roth IRA contribution limits = $6,000
  • Combined IRA contribution limits = $6,000

The limits as they pertain to you are always the smaller of the numbers given or your taxable compensation.  In other words your IRA contribution limits will be the numbers given below unless your 2008 taxable compensation was less than the number given under each circumstance.

Modified AGI rules for 2008

The IRS also says that your IRA contribution limits may be reduced depending upon your modified adjusted gross income (modified AGI).

For 2008 Roth IRA contributions this MAGI phase out range is $105,000 – $120,000 for single filers and $166,000 – $176,000 for married filing jointly.  Basically if your income falls under these amounts your IRA contribution limits will be reduced accordingly.

For 2008 Traditional IRA contributions your MAGI affects your limits on tax deductibility according to you or your spouses participation in employer retirement plans.

  • If neither you nor your spouse participate in an employer retirement plan your contributions are fully tax deductible.
  • If you participate in an employer retirement plan the MAGI phase out range is $55,000 – $65,000 for single filers and $89,000 – $109,000 for married filing jointly.
  • If only your spouse is in an employer retirement plan the MAGI phase out range is $166,000 – $176,000 for married filing jointly.

2008 IRA Contribution Deadlines are April 15th, 2009.

Traditional IRA and Roth IRA Deadlines

As I have touched on in previous articles, if you have not contributed to your 2009 IRA, no need to panic… the IRA deadline is not until tax day – but the sooner you contribute the sooner you can get your taxes done!  🙂

  • IRA deadline for 2008 contributions is April 15th, 2009.
  • IRA deadline for 2009 contributions is April 15th, 2010.
  • IRA deadline for 2010 contributions is April 18th, 2011.
  • IRA deadline for 2011 contributions is April 17th, 2012.

I recommend filing your taxes with TurboTax Online and highly recommend using either Lending Club or Betterment to house your IRA.

Note: I am not a tax professional. Consult IRS Publication 590 and/or your tax professional for details.

My Birth as an Investor

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Hi.  My name is Matt… and I’m an investor. (“Hi Matt.”)

  • Yes I have begun investing.
  • Yes I still have debt.
  • No I have not abandoned my stance on debt reduction before investing.
  • No I have not slowed my aggressive debt reduction strategy.

So what gives?

Why did I begin investing while still in debt?

In a sentence… to better prepare myself for my future as an investor.

There is no doubt that debt repayment is the best investment opportunity currently available to me, and that is why I continue to use all available funds to do just that.  Well, all available funds with the exception of $600 and all Lending Club affiliate earnings.

Where am I investing?

1.  Index Funds with Schwab.com

A few days back I moved $600 of my side hustle earnings into my Roth IRA Account with Schwab who allows beginning investors to start investing with $1,000 or less.  I did this for several reasons:

  1. I cannot max out my 2009 Roth IRA contribution this year, but wanted to contribute at least something… so I did.
  2. Schwab has very low mutual fund investment thresholds, and I wanted to take advantage of the opportunity while it still exists.
  3. I have turned myself into an avid student of investment theory and wanted to use actual money to put that knowledge to practice.
  4. I wanted to get my basic portfolio diversification strategy in place so that when I am ready to invest regularly I can just initiate automatic contributions and stand confident behind my choice of funds.

With help from my friend and blogging colleague Mike Piper (aka The Oblivious Investor) I chose a modified (index fund) version of #7 of these 8 lazy etf portfolios:

  • 30% in Schwab S&P 500 Index Fund (SWPPX)
  • 30% in Schwab Small-Cap Index Fund (SWSSX)
  • 30% in Schwab International Index Fund (SWISX)
  • 10% in the Schwab Total Bond Market Fund (SWLBX)

2.  Lending Club Affiliate Earnings

Investment portfolios are not the only thing we should be diversifying!  Our income should be diversified too.  I hold to this philosophy when monetizing Debt Free Adventure by using as many revenue sources as possible.

One of those revenue sources is Lending Club.  Each month, the earnings from Lending Club are simply deposited into my Lending Club investors account where then put them to work accordingly.

  • I currently have $300 invested in Lending Club notes and hope to see this amount increase nicely over the next few years.

If I had less debt and more cash flow I would be investing much more with Lending Club.  My confidence in LC as an investment vehicle grows as I watch seasoned investors continue to make great returns on their money month after month.

I you are interested in investing with Lending Club:

In closing…

I hope to realize some decent returns from my Lending Club investment while my Schwab Roth IRA account is more of a placeholder for now.  I should also add that neither of the amounts used to fund these investments were taken from our budget; they were taken from my side hustle earnings, allowing me to fund the investments without having to alter our existing budget in any way.

Any thoughts or opinions on my decision to begin investing?

photo by Sir Mervs

Roth IRA and Flexible Spending Account deadlines

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End of Year Action Items

If you have not already done so, NOW is the time for opening a Roth IRA account.  If you do have existing Roth IRAs, be sure to contribute as much as possible this year so you can enjoy the tax sheltered benefits come tax time.

Also, if you participate in an employer sponsored Flexible Spending Account… NOW is the time to discover your remaining balance and spend it before you lose it!

Roth IRAs

As I mentioned above, now is the time for starting a Roth IRA.  If you are out of debt and/or ready to invest, fund your Roth IRA(s) early and often.

Before Opening Roth IRA:

  • Make sure you have some liquid savings set aside for emergencies – in this market I recommend at least 3 months but prefer to have 6 or more.
  • Make sure all your high interest debt is paid off.

Roth IRA Info:

Check this link for the latest Roth IRA information.

  • Roth IRAs are tax exempt accounts, not tax deferred accounts.  Although your contributions are after tax, as long as you follow the rules and keep your grubby hands off the money until you are 59 1/2, all your principal and gains can be drawn tax free!
  • Annual contribution limit is $5,000 for those 59 and younger and $6,000 for those 60+.
  • Single filers with an adjusted gross income of $107,000/year or less can contribute the full amount and the AGI phaseout limit for contributing is $122,000.  *In the video I gave last years phaseout numbers, but those listed here are correct.
  • Joint filers AGI phaseout range is $169,000 – $179,000.
  • Deadline for 2010 contributions is Monday, April 18th, 2011.

Flexible Spending Accounts

Do you take advantage of an employee sponsored FSA?  If so, remember to check your current balance and make sure you spend any remaining amounts before the end of the year.  Why?  Because if you don’t use it… you lose it.  Similar to a Health Savings Account, an FSA is a tax exempt savings for health spending, but unlike HSAs, with FSAs you cannot carry balances over into the next calendar year.

This lack of full consumer control is my fundamental qualm with the FSA structure – people have to guess how much they will spend on health care in yearly intervals and are punished if they guess too high or too low.  With all that said, if you can give a fairly accurate projection of your yearly health spending you stand to realize valuable tax relief… which is the value of the product.

Although I am currently participating in my employer sponsored FSA plan, if I had my druthers I would choose and HSA every time.