How much can you contribute to an IRA in 2011? The answer to this question depends upon your age, the type of IRA, your income, your marital status, and the source of the contribution.
How much can you contribute to a traditional IRA in 2011?
Contribution limits for a traditional IRA depend upon your age at the end of calendar year 2011. If you are under age 50 at the end of 2011, then the amount that you may contribute to your traditional IRA is limited to the lesser of $5,000 or the amount of your taxable compensation earned in 2011. If you are 50 or older at the end of 2011, then you may contribute up to an amount equal to the lesser of $6,000 or the amount of your taxable compensation for 2011.
How much can you contribute to a Roth IRA in 2011?
Generally, the contribution limits for a Roth IRA are the same as the contribution limits for a traditional IRA. However, Roth IRA contributions are also subject to an income limit. If you are married and filing a joint return or a qualifying widower, then you may not contribute to a Roth IRA if your adjusted gross income (AGI) is $179,000 or greater. Your Roth IRA contribution limit will be reduced if your AGI is between $169,000 and $179,000. If your AGI is between $169,000 and $179,000, then you must complete an IRS worksheet to determine the amount of your Roth IRA contribution.
If you are married, filing separately and you lived with your spouse at any time during the year, then you may not make a Roth IRA contribution if your AGI is $10,000 or higher. Additionally, if your AGI is more than $0 but less than $10,000, then your Roth IRA contribution limit is reduced and you must complete an IRS worksheet to determine the amount of your Roth IRA contribution for the year.
If you are single, head of household, or married, filing separately and did not live with your spouse at any time during the year, then you may not make a Roth IRA contribution if your AGI is $122,000 or higher. If your AGI is between $107,000 and $122,000, then your Roth IRA contribution limit is reduced and you must complete an IRS worksheet to determine the amount of your Roth IRA contribution for the year.
How much can you contribute to a Spousal IRA in 2011?
If you are married, filing a joint tax return, and your taxable compensation is less than your spouse’s taxable compensation, then you may make a contribution to your IRA up to the lesser of $5,000 ($6,000 if you are 50 or older) and the total compensation included in gross income for you and your spouse reduced by your spouse’s IRA contributions for the year.
How much can you contribute to a SIMPLE IRA in 2011?
A SIMPLE (Savings Incentive Match Plans for Employees) IRA provides a mechanism for employees to make tax deferred contributions to an IRA. An employee covered by a SIMPLE IRA may elect to defer up to $11,500 of their annual compensation, which the employer then contributes to a SIMPLE IRA on behalf of the employee. Employees who are 50 or over may make an additional elective deferral equal to the lesser of $2,500 or their total compensation for the year less any other elective salary deferrals. The employer must make a matching contribution of the lesser of the amount of the employee’s elective salary deferral or 3 percent of the employee’s annual compensation. In other words, since the amount of the employer’s matching contribution can not exceed $11,500 (the maximum employee salary deferral); the total annual contribution to a SIMPLE IRA cannot exceed $23,000.
How much can you contribute to a SEP IRA in 2011?
A SEP (Simplified Employee Pension) IRA allows an employer to make contributions to an IRA on behalf of an employee. Employer contributions to a SEP IRA cannot exceed the lesser of 25 percent of the employee’s annual compensation or $49,000.