IRAs are usually your first choice account for retirement saving. They are tax-advantaged accounts that allow you to save up to a maximum amount each year for your retirement nest egg, and invest that money into most types of investments. Depending on the type of IRA you invest in, you’ll either pay taxes before you contribute (Roth) or when you withdraw (Traditional).
For 2019 and 2020, anyone can save up to $6,000 in an IRA and up to $7,000 if you’re over 50. There are limits that prevent you from taking federal tax deductions or saving into Roth accounts above certain income levels (see tables below), and a 10% penalty applies if you withdraw before you’re 59.5 years old.
Traditional IRA Federal Tax Deduction Limits
Tables can't be imported directly. Please insert an image of your table which can be found here.
Filing Status
Income
Deduction
Single
<$65,000
Full deduction of contribution
$65,000 - $75,000
Partial deduction
$75,000+
No deduction
Married
<$104,000
Full deduction of contribution
$104,000 - $124,000
Partial deduction
$124,000+
No deduction
Roth IRA Contribution Limits
Tables can't be imported directly. Please insert an image of your table which can be found here.
Filing Status
Income
Limit
Single
<$124,000
Full contribution
$124,000 - $139,000
Partial contribution
$139,000+
No contribution
Married
<$196,000
Full contribution
$196,000 - $206,000
Partial contribution
$206,000+
No contribution