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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.

10 Most Commonly Missed Tax Deductions

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10 Most Commonly Missed Tax DeductionsTax Deductions are your money, don’t miss out on it

We’re coming to the end of tax time once again… and for those of us who do our own taxes that means zeroing in on every tax deduction possible.  At this point in my life I don’t have many out of the ordinary deductions, which makes filing easier from year to year.

The tax deductions I frequently claim include:

  • Donations to charity
  • Mortgage interest
  • Property taxes
  • Student loan interest

In fact, these four main deductions account for 97% of all our deductions combined!  That said, regardless of the amounts every deduction is important, worth finding, and worth using.

In the spirit of hunting for every possible deduction I wanted to bring to your attention an awesome article resource I found while poking around on the TurboTax website entitled ‘The 10 Most Overlooked Tax Deductions.’

Top 10 overlooked and commonly missed income tax deductions

Use this brief list to get ideas and follow the links to read about each one in greater detail.

  1. State sales taxes – useful for those living in states with no income tax. {read more}
  2. Reinvested dividends – easy to miss if you automatically reinvest your mutual fund dividends.
  3. Out-of-pocket charitable contributions – be sure to include mileage and other lesser considered contributions to charitable organizations.
  4. Student loan interest paid by Mom and Dad – the IRS now treats this as a gift to children.
  5. Moving expense to take first job – fresh out of college?  move more than 50 miles away?  this deduction is for you.
  6. Child care credit – useful if your child care costs exceeded your tax-favored reimbursement account at work.
  7. Earned Income Tax Credit – a substantial credit for low-to-moderate income workers that is very frequently missed.
  8. State tax you paid last spring – you are eligible if you owed state income taxes after filing last years return.
  9. Refinancing points – points from refinancing can be deducted equally each year for the entire life of the mortgage.
  10. Jury pay paid to employer – make sure you do not pay taxes on jury fees you must turn over to your employer.

Some of these are deductions while some are actually credits.  Some can be quite substantial while others tend to be small.  Regardless of the size or type… if you can reduce the amount of tax you owe then you would be a fool not to do so.  Hopefully this article will help a few DFA readers keep more of their hard earned money where it belongs… in their own pockets!

Don’t miss these deductions

Before reading these tips I had forgotten about a donation of cash and mileage to the Salvation Army – topic #3 above helped remind me to claim it!

Free TurboTax – Free Returns, Free eFile, and Free Tax Help

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TurboTax – limited free offers

As I mentioned the other day, I have been using TurboTax Online to file my taxes for years and have always been very happy with it.  I gave you my opinion of the software so you could use the info to move forward with your own taxes… I hope it helps out.

Today I wanted to offer DFA readers more tax help by addressing three specific areas of interest:

  1. TurboTax – Free returns

  2. TurboTax – Free efile

  3. TurboTax – Free tax help

Regardless of your situation you will be able to take advantage of some of the free offers from TurboTax this year so make sure you know what you can get and what you cannot.

Does TurboTax offer free returns?

Yes – as long as you use TurboTax Online and only require a 1040EZ form then you can file your federal return for free.  The state is not free.  If your return is too complex for the 1040EZ then you will have to pay according to the following levels (filing a state return is always optional):

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Does TurboTax offer free efile?

Yes – as long as you use TurboTax Online you can file both your state and federal returns free of charge.

Here are the details of what you can efile for free and what you have to pay for when using TurboTax:

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Does TurboTax offer free tax help?

Yes. Actually they offer quite a well of free tax knowledge… a lot of which I refer to quite often to answer questions of my own.  🙂

Here are a few great topics I have found helpful in the past that I’m sure many others will be able to use:

  • Tax Preparation Checklist – Before you prepare your 2009 income tax return, go through the following checklist. Not every category will apply to you, so just pick those that do, and make sure you have that information available. When you’re ready to prepare your tax return using TurboTax software, you’ll be surprised at how much time you’ll save by organizing your information beforehand.
  • 2009 Stimulus Package: What’s In It For You — and When – There’s good news ahead for most taxpayers. On February 17, 2009, President Obama signed the American Recovery and Reinvestment Act into law — an economic stimulus bill that gives tax breaks to a large portion of Americans of all ages and income levels, as well as to businesses.
  • A Stimulus Boost for Some Earned Income Tax Filers – Two recent changes to the Earned Income Tax Credit (EITC) may put more money in your pocket in 2009 and in 2010 if you are married, or if you have three or more qualifying children.
  • The 11 Most Overlooked Tax Deductions – Don’t overpay taxes by overlooking tax deductions. See the most common errors taxpayers make on their tax returns, so you don’t make the same mistakes.
  • Top 10 Oddball Tax Deductions – TurboTax helps you find every deduction and credit you deserve to help you get your maximum tax refund. But just for fun, we’ve uncovered what we think are the weirdest deductions allowed, from pet food to free beer to (we’re not kidding) a girlfriend.

Quick returns quick refunds

If you have an income tax refund due you this year be sure to get your return filed as soon as possible.  The sooner you get your return filed the sooner you will get your refund.

Make sure you use the refund wisely.  Here are a few ideas:  debt reduction, emergency fund savings, other liquid savings, retirement savings, or if you have already funded each of those… go on vacation with your return.  Whatever you do, just make sure you are responsible so you can continue to set yourself up to win financially!