| Traditional IRA | Roth IRA |
Maximum Annual Contribution | For 2022, $6,000 ($7,000 if you reach age 50 or older during the year). | For 2022, $6,000 ($7,000 if you reach age 50 or older during the year). |
Which Funds Can I Rollover Into My IRA? | Traditional IRA
Pre-tax 403(b) account
Pre-tax 401(k) account
Pre-tax 457(b) account | Traditional IRA or Roth IRA, Pre-tax or Roth 403(b)
account*, Pre-tax or Roth 401(k) account*, Pre-tax
or Roth 457(b) account*. |
Is there a Deadline for Contributions? | Contributions are due by the tax filing deadline for the year, without extensions (usually April 15). | Contributions are due by the tax filing deadline for the year, without extensions (usually April 15). |
Is the Contribution Limit Reduced Based on My Income? | No. | Yes. The ability to contribute to a Roth IRA is reduced for higher-income earners. For 2022, you aren’t eligible to contribute to a Roth IRA if your modified adjusted gross income equals or exceeds:
· $144,000 (filing single) · $214,000 (married filing jointly) |
Are My Contributions Tax Deductible? | Yes. However, if you or your spouse is covered by an employer retirement plan (such as the Pension Plan or TDRA), the amount you may deduct is reduced based on your modified adjusted gross income (MAGI) and tax filing status. For 2022, if you’re covered by an employer retirement plan, you may not deduct your Traditional IRA contributions if your MAGI equals or exceeds: $68,000 (filing single) $109,000 (married filing jointly)
Note: Even if you can’t deduct your contribution, you may still contribute to a Traditional IRA. | No. Contributions are made on an after-tax basis. |
How Are My IRA Distributions Taxed? | Deductible contributions and earnings are included in your taxable income upon distribution. Non-deductible contributions are not taxed at distribution. A 10% early distribution tax may apply if you take a distribution before age 59½ unless an exception applies. | Contributions are not taxed upon distribution. Earnings on your contributions are not taxed upon distribution if certain holding requirements have been met. A 10% early distribution tax may apply to earnings if you take a distribution before age 59½ unless an exception applies. |
Is There an Age Limitation for Making Contributions? | No. Effective January 1, 2020, contributions may be made at any age so long as you have taxable compensation. | No. Contributions may be made at any age as long as you have earned income. |
When Do I Have to Begin Taking Distributions? | By April 1 of the calendar year following the year in which you reach age 72 (age 70½ if you reached age 70½ before January 1, 2020). | You do not have to begin taking distributions during your lifetime if you are the original owner or surviving spouse of the Roth IRA. |