Traditional IRA

General:

• Must be 18 years of age or older with taxable compensation
• If you or your spouse is covered by an employer sponsored qualified retirement plan, (such as 401(k) plan, including plans sponsored by self-employed individuals) and your MAGI (Modified Adjusted Gross Income) exceeds certain thresholds, the deductibility of your Traditional IRA contributions for federal income tax purposes may be reduced or eliminated.
• To apply online, you must be a US citizen or resident
• Can open and make a contribution to your Traditional IRA for a tax year at any time during the tax year or by your individual federal tax return filing deadline (not including extensions). This date is generally April 15 of each year. Applications postmarked by this date will be accepted.

Single Filers:

• If taxpayer participates in an employer-sponsored retirement plan, and taxpayer’s MAGI is $77,000 or less in 2024, taxpayer may be eligible to deduct the entire contribution. If taxpayer’s MAGI is more than $77,000 but less than $87,000 in 2024, taxpayer may be eligible to deduct part of the contribution. Taxpayer is not eligible to make a tax deductible contribution if MAGI is $87,000 or more in 2024.

Joint Filers:

• If taxpayer participates in an employer-sponsored retirement plan, and taxpayer’s MAGI is $123,000 or less in 2024, taxpayer may be eligible to deduct the entire contribution. If taxpayer’s MAGI is more than $123,000 but less than $143,000 in 2024, taxpayer may be eligible to deduct part of the contribution. Taxpayer is not eligible to make a tax deductible contribution if MAGI is $143,000 or more in 2024.
• If taxpayer does not participant in an employer-sponsored retirement plan, but taxpayer’s spouse does, then the MAGI limits are different. If taxpayer’s MAGI is $230,000 or less in 2024, taxpayer may be eligible to deduct the entire contribution. If taxpayer’s MAGI is more than $230,000 but less than $240,000 in 2024, taxpayer may be eligible to deduct part of the contribution. Taxpayer is not eligible to make a tax deductible contribution if MAGI is $240,000 or more in 2024, and taxpayer’s spouse participates in an employer-sponsored retirement plan.

An investor can contribute to an IRA account by transferring funds online from a bank or brokerage account, sending a check, or completing a wire transfer. For more information about ways to make a deposit to an account, see the Help topic, Contribute to an IRA account. 

An investor is allowed to contribute 100% of earned income up to the annual contribution limit. View IRA Contribution Limits and Deadlines to learn more. 

Determining if an investor can deduct all or part of their Traditional IRA contribution is based on whether they (or their spouse) have a retirement plan at work, their tax filing status, and modified adjusted gross income (MAGI). To learn more about the amount of your contribution that can be deducted, use the IRA Selector or view IRA Contribution Limits and Deadlines, and speak with your tax advisor.

This is a common myth about retirement investing. An investor may still contribute to an IRA even if they participate in an employer-sponsored retirement plan. However, they may not be able to deduct a Traditional IRA contribution if they exceed certain income limits. View IRA Contribution Limits and Deadlines to learn more.