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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 2018: 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 2018. 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 2018: Your maximum contribution to a Traditional or Roth IRA is the smaller of $6,500 or the amount of your taxable compensation for 2018. 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 $55,000 or 25% of your total compensation minus the self-employment tax.

 

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Wealthfront and its affiliates do not provide tax advice and investors are encouraged to consult with their personal tax advisor. Financial advisory and planning services are only provided to investors who become clients by way of a written agreement. All investing involves risk, including the possible loss of money you invest. Past performance does not guarantee future performance.

Wealthfront prepared this article for informational purposes and is not intended as tax advice nor as an offer, recommendation, or solicitation to buy or sell any security. Wealthfront does not represent that any strategy will result in any of the outcomes described, including the effectiveness of any strategy in reducing tax liability, as this depends on an investor’s specific tax and investment profile. Investors are encouraged to consult their personal tax advisors regarding their unique circumstances and any outcomes/consequences that may result from any investment strategy. 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.

Wealthfront and its affiliates may rely on information from various sources we believe to be reliable (including clients and other third parties), but cannot guarantee its accuracy or completeness. See our Full Disclosure for more important information. Financial advisory and planning services are only provided to investors who become clients by way of a written agreement. All investing involves risk, including the possible loss of money you invest. Past performance does not guarantee future performance.

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