IRA Contributions – John Sutton CPA LLC

Traditional IRA:

Tax Deductible (subject to income limitations if you or your spouse are covered by a retirement plan at work see table below)
No income limits on contributions (though your contribution may not be tax deductible)
Ideal for taxpayers above the Roth IRA income limits, older taxpayers (fewer years for earnings growth), taxpayers with higher tax rates when contributing, or taxpayers that expect lower tax rates in retirement.

Roth IRA:

Contributions are NOT tax deductible
Distributions (amounts withdrawn) are Not Taxable if criteria are met
Income Limits Apply to Contributions (see table below)
Ideal for younger taxpayers (more years for earnings growth), taxpayers with lower tax rates when contributing, taxpayers that expect higher tax rates in their future.

Info that applies to Both Traditional & Roth IRA Accounts:

IRA contributions can be made in addition to retirement plan contributions made through employers, such as 401k or Simple IRA contributions
IRA accounts are setup by individual taxpayers (separate from plans offered through employers)
Requires earned income by you or your spouse
Earnings Grow Tax-Free
$6,500 contribution limit (for traditional & Roth IRA accounts combined) per tax year plus an additional $1,000 for taxpayers that are 50 years of age or older for the 2023 tax year.
Contributions can be made by the due date of your tax return for the prior tax year (2023 contributions can be made by April 15, 2024). Extensions do not apply.

Traditional IRA – How Much can you Deduct?

While income limits do not apply to how much you can contribute to a traditional IRA, there are income limits that apply to how much you can deduct if you or your spouse are covered by a retirement plan at work. Check the table below to determine how much you can deduct if you are covered by a retirement plan at work.

Filing Status	Deduction Phased out on Income Between
Single or Head of Household	$73,000 – $83,000
Married Filing Jointly	$116,000 – $136,000
Married Filing Separately	$0 – $10,000

Source: IRS 2023 IRA Deduction Limits for the 2023 Tax Year on Dec 26, 2023

Roth IRA – How Much can you Contribute?

Income limits apply to Roth IRA contributions based on your filing status. Check the table below to determine how much you can contribute.

Filing Status	Contributions are Phased out on Income Between
Single, Head of Household, or Married Filing Separately and you did not live with your spouse during the year	$138,000 – $153,000
Married Filing Jointly	$218,000 – $228,000
Married Filing Separately and you lived with your spouse during the year.	$0 – $10,000

Source: IRS Roth IRA Contributions you can Make for 2023 on Dec 26, 2023