2009 IRA Contribution Limits

How IRA Contribution Limits Give You a Better Chance to Save

Saving for retirement with an IRA
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An Individual Retirement Account or IRA can play a significant role in your retirement planning efforts. IRAs offer many helpful tax advantages to investors with the primary benefits of tax-deferred investing and potential for tax deductions on your contributions. Roth IRAs provide the potential for tax-free growth of earnings.

IRA contribution limits have changed throughout the years since their introduction in 1974 (Roth IRAs were first introduced in 1997). The 2009 retirement plan contribution limits received few changes from the 2008 tax year. Here are the regular and Roth IRA 2009 contribution limits, plus the updated income restrictions for Roth IRA contributions.

2009 IRA Contribution Limits

The 2009 IRA contribution limits were unchanged from the previous year. In both 2008 and 2009, the limit you could contribute was $5,000. However, if you were 50 or older by the end of the year, you could contribute an extra $1,000, for a $6,000 total contribution limit. These limits apply to both regular and Roth IRAs. Although you may be eligible to contribute to both plans, your combined contribution to both accounts cannot exceed your above limit ($5,000 or $6,000).

Very little has changed since 2009 regarding the contribution limits for an Individual Retirement Account (IRA). In 2013, the maximum IRA contribution limit was raised to $5,500. It is still $5,500 in 2016. One thing that has changed since 2009 is the income limits that impact the tax deductibility of traditional IRAs or the ability to contribute to a Roth IRA.

2009 Roth IRA Income Limits

While you can receive unlimited income and still be eligible to contribute to a regular IRA, the same is not true of a Roth IRA. For the year 2009, married individuals who filed jointly could contribute $5,000 ($6,000 if 50 or older) to a Roth IRA if their combined modified adjusted gross income (MAGI) was below $166,000. If their MAGI was between $166,000 and $176,000, then they could contribute some amount less than their full limit. If their income exceeded $176,000, then they were not eligible to contribute to a Roth IRA for 2009. In 2008, this phase-out range was $159,000 to $169,000.

For single individuals, the Roth IRA phase-out limit was a lower amount: $105,000 to $120,000 for 2009. In 2008, a single individual’s income restriction was between $101,000 and $116,000.

By 2016 these limits had been adjusted for inflation. For single individual or one with a head of household tax filing status, the income phase-out range in 2016 is $117,000 to $132,000. The AGI phase-out range for taxpayers making contributions to a Roth IRA is $184,000 to $194,000 for married couples filing jointly. 

2009 Roth Conversion Income Limitations

With an IRA conversion, investors are able to move money out of a traditional IRA, pay taxes on the funds at ordinary federal and state rates, and then move it into the Roth where it will grow tax-free. During 2008 and 2009, the opportunity to convert a regular IRA to a Roth IRA was only available to those who had a modified adjusted gross income of $100,000 or less. However, this income restriction was completely eliminated in 2010.

To learn more about Roth IRA conversions, check out these Questions to Ask Before Completing a Roth IRA Conversion.

Contribution Limits Have Changed Since 2009

The maximum annual contribution for 2016 is the lesser of $5,500 or 100% of earned income. Taxpayers age 50 and older can contribute another $1,000 for a total contribution of $6,500. You can make a 2016 IRA contribution as late as April 15th, 2017. 

To learn more about IRA contribution limits for other tax years, check out the following links:

Updated by Scott Spann.