Rules for Contributing to an IRA

By Kent Ninomiya

  • Overview

    The Internal Revenue Service enforces strict rules for contributing to an IRA. These rules regulate who is eligible to contribute to an IRA, how much they can contribute, and when they can contribute. The rules for contributing to an IRA can vary significantly. They are different for different tax years, taxpayers of different ages, and different kinds of IRA accounts.
  • Types of IRA

    The rules for contributing to an IRA are different for different types of IRA. Anyone younger than 70 1/2 years old with earned income can contribute to a Traditional IRA regardless of income. However, only taxpayers making less than a predetermined Modified Adjusted Gross Income are allowed to contribute to a Roth IRA. In 2009, this limit is $120,000 for taxpayers filing as single, and $176,000 for married filing jointly taxpayers. Married filing separately taxpayers are not eligible for Roth IRA deposits at all. The Internal Revenue Service adjusts these numbers every year. Check with the IRS for the latest limits.
  • Partial Contributions

    The rules for contributing to an IRA allow taxpayers in certain income ranges to make partial contributions to their Roth IRAs. In 2009, this range was a Modified Adjusted Gross Income of $105,000 to $120,000 for taxpayers filing as single and $166,000 to $176,000 for married filing jointly taxpayers. The amount these taxpayers are allowed to contribute is prorated depending on where their Modified Adjusted Gross Income falls in the phase-out range.


  • Contribution Limits

    The rules for contributing to an IRA limit the amount taxpayers can contribute to their IRAs each tax year. This limit is $5,000 in 2008 and 2009 for both Traditional IRAs and Roth IRAs. Taxpayers who are at least 50 years old are allowed to make "catch-up contributions." Their limit is $6,000 for 2008 and 2009. The Internal Revenue Service adjusts these numbers every few years. Check with the IRS for the latest limits.
  • Tax Deduction

    The rules for contributing to an IRA allow for a tax deduction for some taxpayers for contributions to a Traditional IRA. This is subject to Modified Adjusted Gross Income limits. In 2009, a full deduction is allowed for single taxpayers making less than $55,000 and married filing jointly taxpayers making less than $89,000. Partial deductions are allowed for single taxpayers making between $55,000 and $65,000, and married filing jointly taxpayers making between $89,000 and $109,000. Married filing separately taxpayers are only allowed a partial deduction if they make less than $10,000. No tax deduction is allowed for contributions to a Roth IRA.
  • Earned Income

    The rules for contributing to an IRA only permit contributions with money from earned income. This is money from a paycheck and not investments. Taxpayers may deposit up to the contribution limits in their IRAs unless they made less than that in earned income. In that case their contribution limit is 100 percent of their earned income.
  • Contribution Deadline

    The rules for contributing to an IRA state that all contributions for a given tax year must be made before the tax filing deadline for that tax year. This is usually April 15 of the following calendar year. It is therefore possible to make an IRA contribution for the 2008 tax year up to April 15, 2009.
  • Age Limit

    The rules for contributing to a Traditional IRA prohibit contributions for taxpayers once they reach a certain age. All deposits into Traditional IRAs must stop in the tax year when the owner reaches 70 and one half years old. They are also required to start taking redemptions the following year. Roth IRAs have no such age limits.
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