IRA Contribution Limits 2017

For 2015 - 2017, your total contributions to all of your traditional and Roth IRAs cannot be more than:

  • $5,500 ($6,500 if you’re age 50 or older), or
  • your taxable compensation for the year, if your compensation was less than this dollar limit.

The IRA contribution limit does not apply to:

 

Type of Limitation 2017 2016 2015
Elective Deferrals (401(k) and 403(b); not including adjustments and catch-ups) $18,000 $18,000 $18,000
457(b)(2) and 457(c)(1) Limits (not including catch-ups) $18,000 $18,000 $18,000
Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plans 7 $6,000 $6,000 $6,000
Defined Benefit Plans $215,000 $210,000 $210,000
Defined Contribution Plans (annual additions limit) $54,000 $53,000 $53,000
Annual Compensation Limit $270,000 $265,000 $265,000
Annual Compensation Limit for Grandfathered Participants in Governmental Plans Which Followed 401(a)(17) Limits (With Indexing) on July 1, 1993 $400,000 $395,000 $395,000
Highly Compensated Employee (“HCEs”) $120,000 $120,000 $120,000
Key Employee (if officer) $175,000 $170,000 $170,000
Individual Retirement Accounts (“IRAs”), for individuals 49 and below $5,500 $5,500 $5,500
Individual Retirement Accounts (“IRAs”), for individuals 50 and above $6,500 $6,500 $6,500
SIMPLE Retirement Accounts $12,500 $12,500 $12,500
SEP Coverage $600 $600 $600
SEP Compensation $270,000 $265,000 $265,000
Tax Credit ESOP Maximum Balance $1,080,000 $1,070,000 $1,070,000
Amount for Lengthening of 5-Year ESOP Period $215,000 $210,000 $210,000
Maximum Amount for Qualified Longevity Annuity Contract Purchases $125,000 $125,000 $125,000
Income Subject to Social Security Tax $127,200 $118,500 $118,500
FICA Tax for employers 7.65% 7.65% 7.65%
FICA Tax for employees 7.65% 7.65% 7.65%
Social Security Tax for employers 6.20% 6.20% 6.20%
Social Security Tax for employees 6.20% 6.20% 6.20%
Medicare Tax for employees and employers8 1.45% 1.45% 1.45%
SECA Tax for self-employed workers 15.30% 15.30% 15.30%
Social Security Tax for self-employed workers 12.40% 12.40% 12.40%
Medicare Tax for self-employed workers 2.90% 2.90% 2.90%

Claiming a tax deduction for your IRA contribution

Your traditional IRA contributions may be tax-deductible. The deduction may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels.

Roth IRA contribution limit

The same general contribution limit applies to both Roth and traditional IRAs. However, your Roth IRA contribution might be limited based on your filing status and income.

IRA contributions after age 70½

You can’t make regular contributions to a traditional IRA in the year you reach 70½ and older. However, you can still contribute to a Roth IRA and make rollover contributions to a Roth or traditional IRA regardless of your age.

Spousal IRAs

If you file a joint return, you may be able to contribute to an IRA even if you did not have taxable compensation as long as your spouse did. The amount of your combined contributions can’t be more than the taxable compensation reported on your joint return. See the formula in IRS Publication 590-A.

If neither spouse participated in a retirement plan at work, all of your contributions will be deductible.

Can I contribute to an IRA if I participate in a retirement plan at work?

You can contribute to a traditional or Roth IRA whether or not you participate in another retirement plan through your employer or business. However, you might not be able to deduct all of your traditional IRA contributions if you or your spouse participates in another retirement plan at work. Roth IRA contributions might be limited if your income exceeds a certain level.

Examples

  1. Danny, an unmarried college student working part-time, earns $3,500 in 2016. Danny can contribute $3,500, the amount of his compensation, to his IRA for 2016. Danny’s grandmother can make the contribution on his behalf.
  2. John, 42, has both a traditional IRA and a Roth IRA and can only contribute a total of $5,500 to either one or both in 2016.
  3. Sarah, age 52, is married with no taxable compensation for 2016. She and her husband reported taxable compensation of $60,000 on their 2016 joint return. Sarah may contribute $6,500 to her IRA for 2016 ($5,500 plus an additional $1,000 contribution for age 50 and over).

Tax on excess IRA contributions

An excess IRA contribution occurs if you:

  • Contribute more than the contribution limit.
  • Make a regular IRA contribution to a traditional IRA at age 70½ or older.
  • Make an improper rollover contribution to an IRA.

Excess contributions are taxed at 6% per year as long as the excess amounts remain in the IRA. The tax can’t be more than 6% of the combined value of all your IRAs as of the end of the tax year.

To avoid the excess contributions tax:

  • withdraw the excess contributions from your IRA by the due date of your individual income tax return (including extensions); and
  • withdraw any income earned on the excess contribution.

See Pub 590-A for certain conditions that may allow you to avoid including withdrawals of excess contributions in your gross income.

Additional resources

 

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