The IRA contribution deadline for 2024 is fast approaching! You have until April 15, 2025, to fund your Traditional or Roth IRA—potentially reducing your tax bill and growing your retirement savings.
If you had earned income in 2024, you can contribute up to:
- $7,000 (under age 50)
- $8,000 (age 50 or older by December 31, 2024)
You may also be able to contribute to a spousal IRA, even if your spouse had no earned income.
Traditional IRA: Tax-Deductible Contributions
A Traditional IRA allows tax-deductible contributions, depending on your income and whether you have a workplace retirement plan.
For 2024, you can take a full deduction if:
- Single: Modified Adjusted Gross Income (MAGI) of $77,000 or less
- Married filing jointly: MAGI of $123,000 or less
Partial deductions are available for incomes up to:
- $87,000 (Single)
- $143,000 (Married filing jointly)
If your spouse has a workplace plan but you do not, you can still deduct contributions with a MAGI of $230,000 or less (phasing out at $240,000).
Roth IRA: Tax-Free Withdrawals in Retirement
A Roth IRA is an excellent option if you earn too much for deductible Traditional IRA contributions. While Roth contributions are not tax-deductible, withdrawals in retirement can be completely tax-free if you meet eligibility rules.
For 2024, you can contribute to a Roth IRA if your income is within these limits:
- Single: Full contribution with MAGI of $146,000 or less (partial up to $160,999)
- Married filing jointly: Full contribution with MAGI of $230,000 or less (partial up to $239,999)
Backdoor Roth Strategy
If you exceed Roth IRA income limits, consider a backdoor Roth IRA. This involves making a non-deductible Traditional IRA contribution and converting it to a Roth IRA. However, be aware of tax implications if you have existing IRA balances.
Maximize Your Tax Savings Before the Deadline
Funding an IRA before April 15, 2025, could help lower your 2024 tax bill and boost your retirement savings. You may also qualify for the Saver’s Credit, which provides an additional tax benefit for eligible filers.
Get Personalized Retirement Advice
Not sure whether a Traditional IRA or Roth IRA is right for you? The team at Samalin Wealth is here to help. Contact us today for a personalized retirement strategy that fits your financial goals.
