How Much Can I Contribute to My IRA in 2023?
The amount you can contribute to an IRA in 2023 is determined by several factors. Learn the specific rules for your financial situation to save effectively.
An Individual Retirement Arrangement, or IRA, is a personal savings plan that offers tax advantages to accumulate funds for retirement. These accounts are established by individuals through banks, brokerage firms, or other financial institutions. The purpose of an IRA is to provide a tax-efficient vehicle for long-term savings, supplementing other retirement income sources like Social Security or employer-sponsored plans.
General Contribution Limits
For the 2025 tax year, the maximum amount an individual can contribute to all of their IRAs is $7,000. This limit applies to the combined total of any contributions made to both Traditional and Roth IRAs. An individual cannot contribute $7,000 to a Traditional IRA and another $7,000 to a Roth IRA in the same year, as the total must not exceed this standard limit.
Individuals who are age 50 or over are permitted to make an additional “catch-up contribution” of $1,000. This raises their total contribution limit for the year to $8,000.
Your total contributions cannot exceed your taxable compensation for the year. For example, if a person under age 50 earned $4,000 in taxable compensation in 2025, their maximum IRA contribution for the year would be limited to $4,000, not the full $7,000. This rule ensures that contributions are funded by earned income.
How Income Affects Your Contributions
Your ability to contribute to a Roth IRA or deduct contributions to a Traditional IRA can be limited by your Modified Adjusted Gross Income (MAGI). For a Roth IRA, high income can reduce or completely eliminate your eligibility to contribute. For 2025, if your filing status is single, the ability to contribute is reduced if your MAGI is between $150,000 and $165,000, and you are ineligible above that range. For those who are married filing jointly, the phase-out range is $236,000 to $246,000.
The rules for deducting Traditional IRA contributions depend on whether you or your spouse are covered by a retirement plan at work. If you are not covered by a workplace plan, you can deduct your full contribution regardless of your income. If you are covered by a workplace plan, your deduction is phased out based on your MAGI. For 2025, a single filer covered by a plan sees their deduction phased out with a MAGI between $79,000 and $89,000.
For those married and filing jointly, if the spouse making the IRA contribution is covered by a workplace plan, the deduction phase-out range is $126,000 to $146,000. A different rule applies if you are not covered by a workplace plan but your spouse is. In that scenario, your deduction is phased out if the household MAGI is between $236,000 and $246,000.
Rules for Spousal IRA Contributions
The tax code includes provisions that allow a spouse with little or no earned income to have an IRA funded on their behalf. Known as a spousal IRA, this allows a working spouse to contribute to an account for their partner. This is a standard Traditional or Roth IRA that is subject to specific contribution rules.
To be eligible to make a spousal IRA contribution, the couple must file a joint tax return. The total contributions made for both spouses cannot exceed their combined taxable compensation for the year. For instance, if one spouse earns $80,000 and the other has no earnings, they can contribute to two separate IRAs, one for each spouse.
The individual contribution limits based on age still apply to each account separately. The earning spouse must have enough compensation to cover the total amount contributed for both individuals.
Contribution Deadline and Correcting Overcontributions
The deadline for making contributions to an IRA for a specific tax year is the same as the deadline for filing your federal income tax return for that year. For the 2025 tax year, this deadline is April 15, 2026. Filing for a tax extension does not extend the deadline for making IRA contributions; you must make your contribution by the original tax filing due date.
Should you contribute more than your allowable limit, you have made an excess contribution. To avoid a penalty, you must withdraw the excess amount, along with any income it generated, by the due date of your tax return, including extensions.
If an excess contribution is not corrected in time, the IRS imposes a 6% excise tax on the excess amount. This penalty applies for each year the excess funds remain in your IRA. The penalty is calculated and paid using Form 5329, Additional Taxes on Qualified Plans (including IRAs) and Other Tax-Favored Accounts.