An investor can contribute to either a traditional or Roth IRA or split their contributions between the two, but the combined annual contribution can’t exceed the overall limit. The maximum you can contribute across all IRAs is $6,000 for 2021 and 2022, but you can make an additional catch-up contribution of up to $1,000, for a total of $7,000, if you’re age 50 or older.
Traditional and Roth IRA Contribution Limits in 2022
This chart details historical traditional IRA and Roth IRA combined contribution limits. The two columns represent the combined contribution age limits for those age 49 and younger and those age 50 and older.
Traditional IRA Deduction Limits
Your contributions aren’t limited if you’re covered by a retirement plan at work, but the amount you can claim as a tax deduction could be, depending on your income. The income limits are also based on filing status. Single filers with a modified adjusted gross income (AGI) of $68,000 or less in 2022 can deduct their full contribution to a traditional IRA. This AGI is up from $66,000 in 2021. Married joint filers can take a full deduction in 2022 if their income is $109,000 or less, up from $105,000 in 2021. There’s no deduction limit if you’re single and you don’t have a retirement plan at work, or if you’re married and your spouse doesn’t also have a retirement plan. Your deduction might be limited, depending on your income, if your spouse has access to a retirement plan.
Roth IRA Contribution Limits
Roth IRA contributions are limited based on income. For the 2022 tax year, those who are married and filing jointly must have an income of less than $204,000 to make a full contribution. Those with incomes between $204,000 and $214,000 can make a partial contribution, and those with incomes of $214,000 or more can’t contribute to a Roth at all. Single filers have to make less than $129,000 in 2022 (up from $125,000 in 2021) to make a full contribution to a Roth IRA. Those who are married but filing separately can only make a reduced contribution if their incomes are less than $10,000.
Contribution Deadlines
The deadline for meeting the contribution limit is the initial tax-filing deadline, which is usually April 15 unless the date falls on a weekend. That happens in 2022, so you have until April 18 to fund your IRA account for the 2022 tax year.
Ways of Funding Your IRAs
Your contributions don’t have to be made in one lump sum. You can set up automatic contributions to your IRA once a week or once a month or make other periodic contributions. Assuming that you meet the qualifications to contribute to a Roth, you could split your contributions between a Roth and a traditional IRA, or you could put funds in just one or the other. A Roth offers tax-free withdrawals when you retire. A traditional IRA offers tax deductions now. Both options have their advantages. The better option for you depends on your priorities and your overall financial situation. Keep in mind that the combined annual contribution limit always applies. You can contribute a total of $6,000 to either your traditional or Roth IRA without exceeding the contribution limits if you were 49 years old or younger in 2022. You could split that amount between the two types of accounts as long as you stayed at or below the limit. But you couldn’t contribute $3,000 to a traditional IRA and $3,500 to a Roth. This would put you at a total of $6,500, over the $6,000 limit for your age.
Exceptions to the Rule
Rollovers from one IRA to another don’t count toward your annual contribution limits. You can roll funds over from an IRA of one type to another IRA of the same type. You might move a traditional IRA from one trustee to another because you prefer the fees at the new trustee. You can also convert a traditional IRA to a Roth IRA. This is referred to as a “Roth conversion.” But anything you convert could be counted as taxable income. You might want to roll over funds gradually over a few years to minimize taxes. Remember that Roth IRA contributions are limited based on income thresholds. A “backdoor Roth” is a strategy that has been adopted as a workaround if you should find yourself in this situation. An allowable, nondeductible contribution can be made to a traditional IRA, and then a Roth Conversion can be executed. Rollovers and contribution limits can be complex, so it’s best to consult a tax professional for advice.
