What Are the Traditional IRA Contribution Limits?

A Traditional Individual Retirement Arrangement, or IRA, is a personal retirement savings plan that offers tax advantages. When you contribute money to a Traditional IRA, those funds can grow tax-deferred. This means you do not pay taxes on investment earnings, such as interest, dividends, or capital gains, each year. Taxation is postponed until you withdraw the money during retirement, allowing your investments to compound more rapidly.

Annual Contribution Limits

The Internal Revenue Service (IRS) sets specific limits on the amount of money you can contribute to a Traditional IRA each year. For the 2025 tax year, an individual can contribute up to $7,000. This figure is the maximum combined total you can put into all of your IRAs, including both Traditional and Roth IRAs, and your total contributions cannot exceed your taxable compensation for the year.

The tax code includes a provision for catch-up contributions to help individuals nearing retirement boost their savings. If you are age 50 or older during the calendar year, you can contribute an additional $1,000. This brings the total possible contribution for those age 50 and over to $8,000 for 2025.

Contribution Deductibility Rules

Making a contribution to a Traditional IRA is separate from being able to deduct it on your tax return. The ability to deduct your contribution depends on whether you or your spouse are covered by a workplace retirement plan, like a 401(k) or pension, and your Modified Adjusted Gross Income (MAGI). Your coverage is determined by whether you were an “active participant” for any part of the year according to IRS rules.

If you are covered by a workplace retirement plan, your ability to deduct your IRA contribution is subject to income limitations. For the 2025 tax year, if your filing status is single, the deduction phases out with a MAGI between $79,000 and $89,000. For those who are married and filing jointly, where the contributing spouse is covered by a workplace plan, the phase-out range is between $126,000 and $146,000. If your income is in this range, you can take a partial deduction, and if it exceeds the upper limit, you cannot deduct your contribution.

If you are not covered by a retirement plan at work, you can deduct your full contribution regardless of your income level. The income limitations do not apply in this scenario, offering a tax benefit for those without access to employer-sponsored plans.

A different set of rules applies if you are not an active participant in a workplace plan, but your spouse is. In this case, the income phase-out range for deducting your IRA contribution is more generous. For 2025, if you file a joint return, the deduction is phased out if your couple’s MAGI is between $236,000 and $246,000. This higher threshold acknowledges that one spouse lacks access to a workplace plan.

Spousal IRA Contribution Rules

A Spousal IRA permits a working spouse to make contributions on behalf of a non-working or low-earning spouse. This provision allows both partners in a marriage to save for retirement, even if one does not have taxable compensation. The account is established in the name of the spouse with little or no income.

To make a Spousal IRA contribution, the couple must file a joint federal income tax return. The total combined earned income of both spouses must be at least equal to the total IRA contributions made for both individuals. For example, if contributions for both spouses total $14,000, the couple must have at least $14,000 in taxable compensation.

The contribution limits for a Spousal IRA are identical to the standard annual limits. The receiving spouse is also eligible for the age 50 or older catch-up contribution. Each spouse’s contribution limit is calculated independently.

Correcting Excess Contributions

An excess contribution occurs when you contribute more to your IRA than is legally allowed for a given year. This can happen by exceeding the annual dollar limit or violating the earned income requirement. The IRS imposes a 6% excise tax on the excess amount for each year that it remains in the account, which is paid using Form 5329, Additional Taxes on Qualified Plans.

The most common way to fix an over-contribution is to withdraw the excess amount, along with any net income it earned, before the due date of your tax return, including extensions. This deadline is April 15 of the following year, or October 15 if an extension is filed. While the withdrawn earnings are subject to income tax, the 10% additional tax on early distributions does not apply if the correction is made on time.

If you fail to remove the excess contribution by the tax filing deadline, the 6% excise tax will apply for that year. You can still correct the error for future years by withdrawing the excess amount. Alternatively, you can apply the excess contribution to a subsequent year’s contribution limit by contributing less than the maximum in the following year.