Key Takeaways
- For 2024, the traditional IRA contribution limit is $7,000 (under age 50) or $8,000 (age 50+), and contributions must be made by April 15, 2025 (no extensions)
- Contributions require earned income (compensation), and cannot exceed taxable compensation for the year
- Deductibility depends on whether you or your spouse is an "active participant" in an employer retirement plan—check Box 13 on Form W-2
- For 2024 active participants, deduction phases out at MAGI $77,000-$87,000 (Single) and $123,000-$143,000 (MFJ); if only spouse is covered, $230,000-$240,000
- Excess contributions are subject to a 6% penalty each year they remain in the IRA
Last updated: January 2026
IRA Contributions (Traditional)
2024 Contribution Limits
| Age | Limit |
|---|---|
| Under 50 | $7,000 |
| Age 50+ | $8,000 ($7,000 + $1,000 catch-up) |
Contribution Deadline
Contributions must be made by April 15, 2025 for tax year 2024. Extensions do NOT extend the IRA deadline.
Earned Income Requirement
Qualifies as compensation:
- Wages, salaries, tips
- Self-employment income
- Taxable alimony (pre-2019 divorces)
Does NOT qualify:
- Interest and dividends
- Rental income
- Social Security
Deductibility Rules
Not Covered by Employer Plan
If neither you nor spouse is covered: Fully deductible at any income level.
You ARE Covered by Employer Plan (2024)
| Filing Status | Full Deduction | Phase-Out | No Deduction |
|---|---|---|---|
| Single/HOH | < $77,000 | $77,000-$87,000 | > $87,000 |
| MFJ | < $123,000 | $123,000-$143,000 | > $143,000 |
| MFS | N/A | $0-$10,000 | > $10,000 |
You NOT Covered, But Spouse IS Covered
| Filing Status | Phase-Out Range |
|---|---|
| MFJ | $230,000-$240,000 |
Spousal IRA
A non-working spouse can contribute based on the working spouse's income if filing jointly.
Excess Contributions
6% penalty per year on excess contributions until corrected. Report on Form 5329.
EA Exam Tips
- Deadline is April 15 with NO extensions
- Know the phase-out ranges for each scenario
- Check W-2 Box 13 for active participant status
- Form 8606 for non-deductible contributions
Test Your Knowledge
Michael (age 52) is NOT covered by an employer plan but his spouse IS. Their joint MAGI is $235,000. How much can Michael deduct?
A
B
C
D
Test Your Knowledge
Sandra, age 35, has $6,000 self-employment income and $50,000 rental income. What is her maximum IRA contribution?
A
B
C
D
Test Your Knowledge
Lisa files an extension to October 15, 2025. By when must she make her 2024 IRA contribution?
A
B
C
D