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Traditional IRAs
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Roth IRAs
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Eligibility* †
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You (or your spouse if filing a joint return) can contribute if you have earned income (a salaried job, investments or other sources).
Prior to January 1, 2020, you couldn’t contribute if you were age 70½ or older.
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You (or your spouse if filing a joint return) can contribute if you have earned income and your income level is under certain limits.
For 2024:
Single filer, with modified adjusted gross income (MAGI) of:
Less than $146,000 — full contribution
$146,001–$160,999 — partial contribution
$161,000 or more — not eligible
Joint filers, with MAGI of:
Less than $230,000 — full contribution
$230,001–$239,999 — partial contribution
$240,000 or more — not eligible
Married, filing separately, with MAGI of:
$0–$9,999 — partial contribution
$10,000 or more — not eligible
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Maximum annual contribution‡
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The total contribution you can make to all of your IRAs for 2024 is $7,000 or 100% of your compensation, whichever is less.
If you’re age 50 or older, you can make an additional contribution of $1,000, for a total of $8,000.
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Same as traditional IRA, subject to phase-out range depending on MAGI as explained in Eligibility.
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Deductible contributions
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For 2024:
Single filer, covered by a retirement plan at work, with MAGI of:
$77,000 or less — fully deductible
$77,001–$86,999 — partially deductible
$87,000 or more — nondeductible
Single filer, not covered by a plan at work:
Joint filer, covered by a plan at work, with MAGI of:
$123,000 or less — fully deductible
$123,001–$142,999 — partially deductible
$143,000 or more — nondeductible
Joint filer, only a spouse is covered by a plan at work, with MAGI of:
$230,000 or less — fully deductible
$230,001–$239,999 — partially deductible
$240,000 or more — nondeductible
Married, filing separately, with MAGI of:
$0–$9,999 — partial contribution
$10,000 or more — not eligible
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Roth contributions are not tax-deductible.
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Tax credit for contributions
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You can claim a nonrefundable tax credit for contributions if you are eligible.
The maximum credit allowed is 50% of the annual contribution amount up to $2,000, so long as your household income doesn’t exceed certain limits.
Joint filers with a MAGI of $76,500 or less in 2024 and single filers with a MAGI of $38,250 or less in 2024 qualify for the credit.
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Same as traditional IRA..
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Federal income-tax treatment on contributions
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Taxes are deferred until distributions are made; taxable distributions are treated as ordinary income.
Withdrawals of nondeductible contributions are not taxed.
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Contributions are made with after-tax money; therefore, withdrawals from the contribution amount (basis amount) are tax-free.
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Federal income-tax treatment on earnings
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Earnings grow tax-deferred until distributions begin. Distributions are taxed as ordinary income.
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Qualified distributions are tax-free.
Nonqualified distributions: earnings are taxed as ordinary income and may be subject to a penalty.
Conversions: earnings are tax-free after the conversion amount satisfies the 5-year investment period.
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Conversions
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Conversion to a Roth IRA**: allowed, regardless of MAGI or tax-filing status. The taxable portion of the converted amount will be treated as taxable income.
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Recharacterizations: Investors can’t recharacterize (undo) Roth conversions that occurred on or after January 1, 2018.
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Rollovers
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To employer-sponsored plans: pretax contributions can be rolled over to a 401(k) or to another qualified plan, as well as to 403(b) and 457(b) plans. However, the receiving plan must accept IRA rollovers.
From employer-sponsored plans: eligible pretax and after-tax distributions from qualified plans, as well as from 403(b) and 457(b) plans, can be rolled over.
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From/to another Roth IRA: allowed.
From employer-sponsored plans: eligible Roth contributions and earnings in 401(k) and 403(b) plans can be rolled over. In addition, non-Roth balances can be rolled over. (See Conversions for more information.)
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Distributions††
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Distributions from contributions and earnings can be taken after age 59½ without federal tax penalty.
Mandatory withdrawals must begin no later than April 1 of the year following the year you reach age 73.
Distributions before age 59½ are subject to a 10% tax penalty unless you qualify for one of the following exceptions under section 72(t) of the Internal Revenue Code:
- You’re disabled
- You’re taking substantially equal periodic payments
- The distribution is for certain medical bills
- The distribution is used for health insurance premiums during unemployment lasting at least 12 weeks
- The distribution is for post-secondary education expenses
- The distribution is used to purchase a first home (up to $10,000 lifetime maximum)
- You’re terminally ill
- The distribution is due to a federally declared disaster (up to $22,000)
- The distribution is for birth or adoption expenses (up to $5,000)
- The distribution is for unforeseeable or immediate financial needs related to necessary personal or family emergency expenses (up to the lesser of $1,000 or the excess of your account balance over $1,000)
- The distribution is due to domestic abuse (up to the lesser of $10,000 as adjusted for inflation or 50% of the account balance)
Distributions to your beneficiaries are also exempt from the 10% penalty.
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Distributions from contributions can be made any time without taxes or federal tax penalty.
Distributions from earnings are tax-free if your initial contribution to the account was made at least 5years ago and you meet one of the following conditions:
Payments made to your beneficiaries after the 5-year period are also tax- and penalty-free. Payments made before the end of the 5-year period are penalty-free.
Distributions from earnings are not subject to the 10% penalty as long as you qualify for an exception — same as exceptions for traditional IRAs.
Distributions from a conversion amount must satisfy a 5-year investment period to avoid the 10% penalty. This pertains only to the conversion amount that was treated as income for tax purposes.
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Required minimum distributions (RMDs)
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You must begin taking RMDs no later than April 1 of the year following the year you turn 73.‡‡
All of your IRA balances are aggregated for the purposes of calculating RMDs. Withdrawals may be taken from one or more IRAs.
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No RMDs apply during your lifetime.
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