In tax year 2012, the maximum contribution limit for IRAs is $5,000. This applies to Roth IRAs or traditional IRAs or a combination of the two. The IRS also has a catch-up plan for people who are 50 and older. They can contribute an extra $1,000 (for a maximum of $6,000) in 2012. In order to contribute to an IRA, you must have earned income from wages, a salary, or net self-employment earnings.
There are no income restrictions for contributions to traditional IRAs, although there are limits (indexed annually for inflation) that determine whether a traditional IRA contribution is tax-deductible. For Roth IRAs, the 2012 income limits to be able to make a full contribution are $110,000 for single taxpayers and $173,000 if married and filing jointly. The amount allowed to contribute phases out completely above incomes of $125,000 for singles and $183,000 for joint filers. We would like your feedback on this Personal Finance Frequently Asked Question.
