IRA Contribution Limits for 2014

Find Out How Much You Can Put in Your IRA in 2014

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Max out your nest egg in 2014.. (c) Getty Images

Every year or two, the maximum amount you can put into an individual retirement account, or contribution limit, increases with inflation. You can find past contribution limits here:
2012 IRA Contribution Limits
2013 IRA Contribution Limits
During the 2014 tax year, some of the numbers edged up slightly, but many others stayed the same. See what you could put away for retirement in 2014.

2014 IRA Contribution Limits

In 2014, the maximum contributions limit was $5,500. If you are age 50 1/2 or older you could add another $1,000 for a maximum contribution of $6,500 in 2014. That is, if your employer offers a catch-up contribution to encourage participants older than age 50 to save more in their pre-retirement years.

2014 Deductible IRA Contribution Limits

One of the benefits of contributing to an IRA is the potential to decrease your taxable income. For some individuals, IRA contributions are fully or partially income tax deductible. Typically, those who qualify do not have a 401(k) or retirement savings plan through work. You must also meet certain income limitations. The income levels are up slightly from last year. In 2014, your deduction amount phased out if your income was between $60,000 and $70,000. If you are married and file jointly you could likely take a deduction if your income was less than $96,000, and you would be ineligible if your income exceeded $116,000.

If your spouse was covered at work but you are not,the phase out income amounts range from $181,000 and $191,000.

Note: You can make contributions to an IRA for a given tax year up until the time you file your income taxes for that year. That means you could have made a 2014 contribution up until April 15, 2015.

This makes the IRA a great tax planning tool.

2014 Contribution Limits for Other Types of IRAs

Roth IRA contribution limits are the same as traditional IRA limits: $5,500 or $6,500 if you are age 50 or older. Bear in mind, although the contribution limits are the same, Roth IRAs work differently. The money you put into a Roth is not tax deductible, Roth IRAs get after-tax dollars. But once in a Roth, the money is generally not taxed again when you withdraw the money at retirement. You can even take contributions out without penalty before retirement, although there are some restrictions on that too. If you are not getting a tax deduction on your IRA contributions, a Roth IRA could be a better idea for the long term. They are particularly attractive if you tax rate is currently low and you expect it to rise significantly by retirement age. That's the jackpot you are hoping for with a Roth IRA: you pay today's low taxes on tomorrow's potential millions.

2014 Self-Employed IRA Contribution Limits

Individuals who own their own business or work as a contractor have their own IRA choices: SIMPLE IRAs rose to $12,000 in 2014, with catch-up contributions of $2,500.

Contribution limits for SEP IRAs work differently. You could contribute up to 25% of gross income up to $260,000, for a maximum contribution of $52,000 in 2014.

If you had an Individual 401(k) or Solo 401(k), your limits were the same as those for a regular 401(k): $17,500 in 2014, with an additional $5,500 catch-up contribution. That's a total maximum of $23,000.

Whatever type of IRA you have, your goal should be to contribute either up to the limit, or to get as close as you can. With a limit of $5,500, this should be a fairly easy goal. How much money did you contribute to an IRA in 2014?

Current Tax Year Information

Are you seeking information about the IRA contribution limits for the current tax year?  Check out the link below for more details about how much you can contribute to an IRA for the 2016 tax year.

2016 IRA Contribution Limits

The content on this site is provided for information and discussion purposes only. It is not intended to be professional financial advice and should not be the sole basis for your investment or tax planning decisions. Under no circumstances does this information represent a recommendation to buy or sell securities.

 

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