economy
There's a key number to know before making a last-minute IRA contribution by April 15
There's still time for a last-minute IRA contribution for 2025. But there are key things to know before making a deposit, experts say.
TL;DR
- The IRA contribution deadline for 2025 is April 15.
- Average IRA contributions increased by 18% in the two weeks before March 20, compared to the previous five weeks.
- Nearly 75% of these recent IRA deposits were made to after-tax Roth IRAs.
- The IRA contribution limit for 2025 is $7,000, with an additional $1,000 for those age 50 and older, provided they have sufficient earned income.
- Roth IRA contributions do not offer an upfront tax break, but funds grow tax-free, and withdrawals in retirement are generally tax-free.
- Traditional IRA contributions may offer a deduction, but the money grows tax-deferred, and withdrawals are taxed as regular income.
- Eligibility for Roth IRA contributions and traditional IRA deductions is based on Modified Adjusted Gross Income (MAGI) and, for traditional IRAs, participation in workplace retirement plans.
- For 2025, single filers with MAGI below $150,000 and married couples filing jointly with MAGI below $236,000 can contribute the full Roth IRA amount. Limits phase out above these thresholds.
- Anyone with earned income can make traditional IRA contributions, but the deductibility of those contributions can be limited by MAGI and workplace plan participation.