You Can Still Make a 2024 IRA Contribution

The tax filing deadline is fast approaching, which means time is running out to fund an IRA for 2024. But you may still be able to contribute up to $7,000 for 2024 ($8,000 for those age 50 or older) up until your tax return due date. For most people, that date is Tuesday, April 15, 2025.

You can contribute to a traditional IRA, a Roth IRA, or both. Total contributions cannot exceed the annual limit or 100% of your taxable compensation, whichever is less. You may also be able to contribute to an IRA for your spouse for 2024, even if your spouse had no earned income.

Traditional IRA contributions may be deductible

If you and your spouse were not covered by an employer sponsored retirement plan in 2024, your traditional IRA contributions are fully tax deductible. If you were covered by a retirement plan, you can take a full deduction if you're single and had a 2024 modified adjusted gross income (MAGI) of $77,000 or less, or married filing jointly with a 2024 MAGI of $123,000 or less.

Consider a Roth Contribution

If you can't make a deductible traditional IRA contribution, a Roth IRA may be a more appropriate alternative. Although Roth IRA contributions are not tax-deductible, qualified distributions are tax-free. You can make a full Roth IRA contribution for 2024 if you're single and your MAGI was $146,000 or less, or married filing jointly with a 2024 MAGI of $230,000 or less.

Too Much Income to make a Roth Contribution? (go through the back door)

If you can't make an annual contribution to a Roth IRA because of the income limits, there is another way in. You can make a nondeductible contribution to a traditional IRA and then immediately convert/transfer that traditional IRA contribution to a Roth IRA. (This is sometimes called a backdoor Roth IRA.)

To learn more, contact MNM Vested, LLC