IRA Contribution Limits

• The IRS sets the contribution limits for IRA accounts each year, and they review those limits on an annual basis. For 2011, workers can contribute up to $5,000 of their earned income to a traditional or a Roth IRA account. Individuals can contribute earned income only. You cannot, however, contribute unearned income, such as earnings from a pension, interest or dividends, to your IRA. If you are married, you can make an IRA contribution on behalf of your spouse, even if your spouse does not have earned income for the year.
  
  

Older Workers

• Workers who are 50 years of age and older are allowed to contribute an extra $1,000 to their traditional or Roth IRA accounts for 2011. Those workers must meet the income requirements governing the Roth or traditional IRA, and they must have sufficient earned income to cover their IRA contributions. For 2011, workers 50 years of age and older can contribute up to a total of $6,000 to their IRA accounts. This $6,000 limit is for both the Roth and the traditional IRA. For instance, older workers can put $3,000 into a Roth and another $3,000 into a traditional IRA, but not $6,000 into a Roth and another $6,000 in a traditional plan.
  
  

Traditional IRA Income Limits

• Not every worker can contribute to a traditional deductible IRA. The IRS imposes income limits designed to make these plans most accessible to low and moderate income taxpayers. For 2011, single taxpayers who make less than $56,000 can take the full deduction for their IRA, even if they are covered by a retirement plan at work. Those who make between $56,000 and $66,000 can take a partial deduction, while those who make more than $66,000 cannot get a deduction for a traditional IRA. The same rules apply to married filers, but the income limits are different. Married couples filing jointly and covered by a plan at work can deduct their IRA contributions if their combined income is less than $90,000, take a partial deduction between $90,000 and $110,000 and have no deduction after $110,000 in income. Those not covered by a plan at work have higher limits.
  
  

Roth IRA Income Limits

• If you want to contribute to a Roth IRA for 2011, you can make the full $5,000 or $6,000 contribution if your income income is less than $107,000 and you are a single filer. If you are married, you can make the full contribution if your income is under $122,000. For single taxpayers with income between $107,000 and $122,000, the availability of the Roth IRA slowly phases out, and those with incomes above $122,000 cannot contribute at all. For married taxpayers the Roth IRA contribution begins to phase out at $168,000 in income, and disappears completely above $179,000 in income.