Not all tax numbers stay the same over time. Many income limits and other tax numbers are adjusted each year, either for inflation, or by another statutory mandate. These tax numbers include the tax tables and tax brackets for each year, for example. It also includes IRA contribution limits. The IRS announces the numbers each fall.
Since the numbers are adjusted based on inflation, they only increase if there is enough inflation over the course of the year to increase the IRA contribution limits by the same percentage. With some crazy inflation this year, you would expect some of the IRS numbers to be up significantly. IRA contribution limits for 2023 are higher than they were in 2022.
2022 IRA Contribution Limits
The 2022 IRA contribution limits were published by the IRS in late 2021. Note that these limits are for contributions made during the 2022 tax year, for use when filing income taxes due by April 2023.
IRA Max Contribution 2022
The maximum IRA contribution for 2022 is $6,000. This is the same as the maximum deduction for 2021, 2020, and 2019. The maximum IRA contribution in 2023 is $6,500, up $500 from the year before.
Both the 2022 and 2023 IRA catch-up contribution amount remains unchanged at $1,000. Only taxpayers over age 50 are permitted to make a catch-up contribution to an IRA account. 2023 IRA contribution limits are $7,500 for those age 50 and over.
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Therefore, taxpayers under age 50 may contribute up to $6,500 to their IRA during the 2023 tax year and those over age 50 may contribute up to $7,000. Remember, however, that IRA contributions may be made through April 15th of the following year. In other words, contributions made anytime between January 1, 2023, and April 15, 2024, may be claimed as a 2023 deduction for those who qualify for a deductible IRA contribution. This is provided, of course, that none of the amount contributed between January and April 15th, 2023, was already deducted on your 2022 taxes.
Maximum Income for Deductible IRA Contributions 2022 and 2023
Traditional IRA contributions are tax deductible for taxpayers with incomes below certain thresholds. These income limits are also adjusted each year for inflation. If you, or your spouse, are covered by an eligible retirement plan at work, then for 2022, the maximum adjusted gross income (AGI) for a full IRA contribution deduction is $109,000 for joint filers, and $68,000 for single filers. In 2023, the AGI for fully deductible IRA contributions is $116,000 for married filing jointly, and $73,000 for those filing single.
IRA Income Limits 2022
How much can you contribute to IRA in 2022? Taxpayers with high incomes above these amounts will have to calculate the phase-out for their 2022 IRA contributions and 2023 contributions. Those with incomes higher than $129,000 for married filing jointly, or $78,000 for those filing single, cannot deduct any part of their contribution to a traditional IRA account for 2022. The 2023 IRA income limits end at $136,000 and $83,000 after which no deduction is allowed.
Taxpayers who do not have an eligible retirement plan offered at work, and whose spouse is also not covered by a work retirement plan may take a full deduction for IRA contributions regardless of how much money they earn.
If a taxpayer is not covered by a retirement plan at work, but their spouse IS COVERED, then the income limit for a fully deductible contribution is $204,000 or less. Deductible IRA contributions are phased out in such cases for incomes between $204,001 and $214,000 during 2022.
Non-Deductible IRA Contributions
Regardless of income, taxpayers may contribute to a traditional IRA with a non-deductible IRA contribution. Some taxpayers may find it more advantageous to contribute to a Roth IRA if they are unable to deduct a traditional IRA contribution. Although, there are different income limits for Roth IRAs in 2022 and 2023.
Where To Deduct IRA Contributions
Deduction IRA contributions happens on Schedule 1 of Form 1040, Additional Income and Adjustments to Income. Filing a Schedule 1 does not require taxpayers to itemize deductions. Your deduction amount goes on Line 19 subject to the above IRA income limits, and IRA contribution limits.
You can take an IRA deduction without itemizing your deductions.