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IRA limits for 2020
January 30, 2020

Fast Facts on IRA Limits for 2020

  1. The maximum amount you can contribute to a traditional IRA or a Roth IRA in 2020 is $6,000 (or 100% of your earned income, if less), unchanged from 2019. The maximum catch-up contribution for those age 50 or older remains at $1,000 additional.
  2. You may be able to contribute to both a traditional IRA and a Roth IRA in 2020, but your total contributions can’t exceed the annual limits.
  3. Anyone can contribute to a traditional IRA at any income level, but tax deductibility is based on modified adjusted gross income (MAGI).
  4. Roth IRA contributions are limited by income level, meaning that you may earn too much to contribute to a Roth IRA.

Traditional IRA Income Limits for Tax Deductions

If you are not covered by an employer retirement plan, your contributions to a traditional IRA are generally fully tax deductible.

For those who are covered by an employer plan, the income limits for determining the deductibility of traditional IRA contributions in 2020 have increased. If your filing status is single or head of household, you can fully deduct your IRA contribution up to $6,000 ($7,000 if you are age 50 or older) in 2020 if your MAGI is $65,000 or less (up from $64,000 in 2019). If you’re married filing jointly, you can fully deduct up to $6,000 ($7,000 if you are age 50 or older) in 2020 if your MAGI is $104,000 or less (up from $103,000 in 2019).

 

If you’re not covered by an employer plan but your spouse is, and you file a joint return, your deduction is limited if your MAGI is $196,000 to $206,000 (up from $193,000 to $203,000 in 2019) and eliminated if your MAGI exceeds $206,000 (up from $203,000 in 2019). But, even if you earn too much to deduct your contributions, there’s no income limit for contributing to traditional IRAs, so even if your income is higher, you can still save for retirement using an IRA.

Roth IRA Income Limits for Contributions

The income limits for determining how much you can contribute to a Roth IRA have also increased for 2020. If your filing status is single or head of household, you can contribute the full $6,000 ($7,000 if you are age 50 or older) to a Roth IRA if your MAGI is $124,000 or less (up from $122,000 in 2019). And if you’re married and filing a joint return, you can make a full contribution if your MAGI is $196,000 or less (up from $193,000 in 2019). (Again, contributions can’t exceed 100% of your earned income.) You cannot contribute to Roth IRAs if your MAGI is above the threshold determined based on your filing status.

 

Questions? Contact a CFS Financial Advisor.

Grow has contracted with CUSO Financial Services, L.P. (CFS) to provide investment services, and your CFS Financial Advisor will help you build a plan that meets your needs. The advisor will look at your current spending, saving and investing, learn about your goals and priorities, make objective recommendations and support your efforts moving forward through the implementation and management of your plan.

Schedule a Complimentary Consultation

Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members. For specific tax advice, please consult a qualified tax professional.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2020.


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