The IRS recently announced the Traditional and Roth IRA contribution limits for tax year 2013. The limitations are indexed to inflation, but only in $500 increments (as of 2010) which are triggered when the cost-of-living calculation reaches a certain threshold. The threshold was finally met, so the limit on annual contributions to an Individual Retirement Arrangement (IRA) increases to $5,500, up from $5,000. However, the additional catch-up contribution allowed for those age 50 and higher remains $1,000.
The limits are the same for both Roth and Traditional IRAs, but each one has their own unique set of eligibility requirements. IRAs are “individual” accounts by definition, so the limits are per person. The deadline for 2012 tax year contributions is the same as the 2012 tax return filing deadline: Monday, April 15, 2013. Tax return extensions won’t apply to this cutoff.
Since I like visual aides, here’s a historical chart and table of recent contribution limits. I’m proud to say that we’ve both done the max since 2004. Have you been taking advantage of your potential IRA tax break?
|Year||IRA Contribution Limit||Additional Catch-Up Allowed (Age 50+)|