This page should be used as a reference for IRA contribution limits. For IRA eligibility and tax deductions see our IRA Deductions and Eligibility page here. This information was gathered directly from www.irs.gov
IRA Contributions must be made in cash directly to your IRA custodian, you cannot contribute property. IRA contributions should not be confused with rollovers or gains from your IRA investments.
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Traditional and Roth IRA Contributions (2012-2013)
For 2012, the maximum you can contribute to all of your traditional and Roth IRAs is the smaller of:
$5,000 ($6,000 if youre age 50 or older), or
your taxable compensation for the year.
For 2013, the maximum you can contribute to all of your traditional and Roth IRAs is the smaller of:
$5,500 ($6,500 if youre age 50 or older), or
your taxable compensation for the year.
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SEP IRA Contributions (2012-2013)
A Simplified Employee Pension (SEP) plan provides business owners with a simplified method to contribute toward their employees retirement as well as their own retirement savings. Contributions are made to an Individual Retirement Account (IRA) set up for each plan participant (a SEP-IRA).
A SEP-IRA account is a traditional IRA and follows the same investment, distribution, and rollover rules as traditional IRAs.
The contributions you make to each employees SEP-IRA each year cannot exceed the lesser of:
25% of compensation, or
$50,000 for 2012; $51,000 for 2013
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SIMPLE IRA Contributions (2012-2013)
Much like SEP IRAs, a SIMPLE plan is an employer sponsored plan. The difference is that SIMPLE IRA contributions are made mostly by the employee rather than the employer.
SIMPLE IRA contributions include:
salary reduction contributions and
employer contributions: a. matching contributions or b. nonelective contributions.
No other contributions can be made to a SIMPLE IRA plan.
Salary reduction contributions. The amount the employee contributes to a SIMPLE IRA cannot exceed $11,500 in 2012 ($12,000 in 2013).
If an employee participates in any other employer plan during the year and has elective salary reductions under those plans, the total amount of the salary reduction contributions that an employee can make to all the plans he or she participates in is limited to $17,000 in 2012 ($17,500 in 2013).
Catch-up contributions. If permitted by the SIMPLE IRA plan, participants who are age 50 or over at the end of the calendar year can also make catch-up contributions. The catch-up contribution limit for SIMPLE IRA plans for 2012 and 2013 is $2,500.
Employer matching contributions. The employer is generally required to match each employee’s salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee’s compensation. This requirement does not apply if the employer makes nonelective contributions instead.
Lower percentage. An employer may choose to make a matching contribution less than 3%, but it must be at least 1% and for no more than 2 out of 5 years.
Nonelective contributions. Instead of matching contributions, an employer can choose to make nonelective contributions of 2% of each eligible employees compensation. If the employer makes this choice, it must make nonelective contributions whether or not the employee chooses to make salary reduction contributions.
