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What is the maximum amount I can contribute to an IRA each year?

The answer is the same for Traditional and Roth IRAs:

  • If you are under 50 years of age at the end of 2016: The maximum contribution that you can make to a traditional or Roth IRA is the smaller of $5,500 or the amount of your taxable compensation for 2016. This limit can be split between a Traditional and a Roth IRA but the combined limit is $5,500. The maximum contribution to a Roth IRA and the maximum deductible contribution to a Traditional IRA may be reduced depending upon your modified adjusted gross income (modified AGI).
  • If you are 50 years of age or older before the end of 2016: Your maximum contribution to a Traditional or Roth IRA is the smaller of $6,500 or the amount of your taxable compensation for 2016. This limit can be split between a Traditional and a Roth IRA but the combined limit is $6,500. The maximum contribution to a Roth IRA and the maximum deductible contribution to a Traditional IRA may be reduced depending upon your modified AGI.

If you are self-employed and qualify for a SEP-IRA then you may contribute the lesser of $53,000 or 25% of your total compensation minus the self-employment tax.

 

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This article is not intended as tax advice, and Wealthfront does not represent in any manner that the outcomes described herein will result in any particular tax consequence. Prospective investors should confer with their personal tax advisors regarding the tax consequences based on their particular circumstances. Wealthfront assumes no responsibility for the tax consequences to any investor of any transaction. Investors and their personal tax advisors are responsible for how the transactions in an account are reported to the IRS or any other taxing authority.

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