Starting with tax year 2020, taxpayers of any age — even those over 70 ½ — can start a traditional IRA.
Eligible taxpayers can usually contribute up to $6,000 to an IRA for 2019. The limit is increased to $7,000 for taxpayers who were 50 or older by the end of 2019.
However, the IRS explains that if a taxpayer is covered by a workplace retirement plan, the deduction for contributions to a traditional IRA for tax year 2019 is reduced if the taxpayer’s modified adjusted gross income (MAGI) is:
- More than $64,000 but less than $74,000 for a single individual, head of household, or a married person filing separately who didn’t live with their spouse at any time in 2019. No deduction if $74,000 or more.
- More than $103,000 but less than $123,000 for a married couple filing a joint return or a qualifying widow(er). No deduction if $123,000 or more.
- More than $193,000 but less than $203,000 for a married couple filing a joint return where one spouse is covered by a retirement plan at work and the other is not. No deduction if $203,000 or more.
- Less than $10,000 for a married individual filing separately and lived with their spouse at any time during 2019. No deduction if $10,000 or more.
Even though contributions to Roth IRAs are not tax deductible, for tax year 2019 the maximum amount a taxpayer can contribute is reduced if their MAGI is:
- $122,000 or more for a single individual, head of household, or a married person filing separately who didn’t live with their spouse at any time in 2019. No contribution allowed if MAGI is $137,000 or more.
- $193,000 or more for a married couple filing jointly or a qualifying widow(er). No contribution allowed if MAGI is $203,000 or more.
- Less than $10,000 for a married individual filing separately and lived with their spouse at any time during 2019. No contribution if $10,000 or more.
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July 09, 2020 at 12:53 PM
