DESKTOP VIEW

Top Tips on Making IRA Contributions

If you made IRA contributions or you’re thinking of making them, you may have questions about IRAs and your taxes. Here are some important tips from the IRS about saving for retirement using an IRA.

1. You must be under age 70 1/2 at the end of the tax year in order to contribute to a traditional IRA. There is no age limit to contribute to a Roth IRA.

2. You must have taxable compensation to contribute to an IRA. This includes income from wages and salaries and net self-employment income. It also includes tips, commissions, bonuses and alimony. If you’re married and file a joint return, generally only one spouse needs to have compensation.

3. You can contribute to an IRA at any time during the year. To count for 2013, you must make all contributions by the due date of your tax return. This does not include extensions. That means you usually must contribute by April 15, 2014. If you contribute between Jan. 1 and April 15, make sure your plan sponsor applies it to the right year.

4. In general, the most you can contribute to your IRA for 2013 is the smaller of either your taxable compensation for the year or $5,500. If you were age 50 or older at the end of 2013, the maximum you can contribute increases to $6,500.

5. You normally won’t pay income tax on funds in your traditional IRA until you start taking distributions from it. Qualified distributions from a Roth IRA are tax-free.

6. You may be able to deduct some or all of your contributions to your traditional IRA. Use the worksheets in the Form 1040A or Form 1040 instructions to figure the amount that you can deduct. You may claim the deduction on either form. Unlike a traditional IRA, you can’t deduct contributions to a Roth IRA.

7. If you contribute to an IRA you may also qualify for the Saver’s Credit. The credit can reduce your taxes up to $2,000 if you file a joint return. Use Form 8880, Credit for Qualified Retirement Savings Contributions, to claim the credit. You can file Form 1040A or 1040 to claim the Saver’s Credit.

8. See Publication 590, Individual Retirement Arrangements, for more about IRAs.

You can get forms and publications on IRS.gov or order them by calling 800-TAX-FORM (800-829-3676).

Additional IRS Resources:

Individual Retirement Arrangements (IRAs)
IRA FAQs
Tax Topic 451 – Individual Retirement Arrangements (IRAs)
1040 Central
IRS Tax Map
Back to Top

Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov.

Protax Consulting Services Seven Penn Plaza, Suite 416
New York, NY 10001
Tel 212.714.9070
Fax 212.714.6654
protax@protaxconsulting.com

Member and Featured Faculty of:

American Institute of Certified Public Accountants

New York State Society of Certified Public Accountants

NYSSCPA’s 100%
Membership Program

Association of International Tax Consultants, U.S. Member

CCH Wolters Kluwer Faculty

Lawline Faculty

Furthered Faculty

Strafford Faculty

Clear Law Institute Faculty

Clear Law Institute Faculty

Contact Us for U.S.
International Individual Tax

wherever you are, .
wherever you go
- Download our FREE apps -


Download the Protax App on the App Store

Download the Protax App on Google Play

Member and Featured Faculty of:

  • American Institute of Certified Public Accountants
  • NYSSCPA’s 100% Membership Program
  • Association of International Tax Consultants, U.S. Member
  • Faculty
  • Faculty