IRA Contributions for ’17 Reporting: Tempus Fugit!
There is still some time to make a contribution to an IRA and be able to claim it on a 2017 tax return — but not much. The IRS issued a reminder on March 20 that anyone with an IRA may be eligible for a tax credit or deduction on their 2017 tax return if they make contributions by April 17, 2018.
Generally, eligible taxpayers can contribute up to $5,500 to an IRA. For someone who was 50 years of age or older at the end of 2017, the limit is increased to $6,500. The same general contribution limit applies to both Roth and traditional IRAs. However, a Roth IRA contribution might be limited based on filing status and income. An individual can’t make regular contributions to a traditional IRA in the year they reach age 70? and older. However, they can still contribute to a Roth IRA and make rollover contributions to a Roth or traditional IRA regardless of age.
If neither the taxpayer nor their spouse was covered for any part of the year by an employer retirement plan, they can take a deduction for total contributions to one or more traditional IRAs up to the contribution limit or 100% of the taxpayer’s compensation, whichever is less.
For 2017, if a taxpayer is covered by a workplace retirement plan, the deduction for contributions to a traditional IRA is generally reduced if the taxpayer’s modified adjusted gross income is between:
- $0 and $10,000, married filing separately
- $62,000 and $72,000, single and head of household
- $99,000 to $119,000, married filing jointly or a qualifying widow(er)
- $186,000 to $196,000, married filing jointly when the IRA contributor is not covered by a workplace retirement plan but is married to someone who is
Even though contributions to Roth IRAs are not tax deductible, the maximum permitted amount of these contributions is phased out for taxpayers whose modified adjusted gross income is above a certain level:
- $0 to $10,000, married filing separately
- $118,000 to $133,000, single and head of household
- $186,000 to $196,000, married filing jointly
More detailed information on contributing to either Roth or Traditional IRAs is available here