IRA Contribution Limits 2023 For Married Couples
As the tax year 2023 approaches, married couples need to understand the individual retirement account (IRA) contribution limits for them. A married couple filing jointly can take advantage of the same IRA contribution limits as any other individual, but there are some additional considerations to keep in mind.
Understanding the IRA Contribution Limit
For 2023, the annual limit for an individual IRA contribution is set at $6,000 ($7,000 if you are age 50 or older). This limit applies to each person separately, so a married couple filing jointly can contribute up to a total of $12,000 ($14,000 if both spouses are age 50 or older) between their two accounts. Any contributions made in excess of these limits may be subject to a 6% excise tax.
Catch-up Contributions
In addition to the regular annual contribution limit, the IRS allows individuals age 50 and older to make catch-up contributions to their IRA account. This means that a married couple filing jointly and both of whom are age 50 or older can contribute up to $16,000 ($14,000 for regular contributions, plus an additional $2,000 for catch-up contributions).
Roth IRA Contributions
In addition to traditional IRA contributions, a married couple filing jointly can also make Roth IRA contributions. The contribution limits for a Roth IRA are the same as for a traditional IRA ($6,000 or $7,000 if age 50 or older). However, the income limits for Roth IRA eligibility are slightly different for married couples filing jointly. In order to be eligible to contribute to a Roth IRA, the couple’s modified adjusted gross income must be less than $196,000.
Spousal IRA Contributions
In addition to their personal IRA contributions, married couples can also contribute to a spousal IRA. This is an individual retirement account that is opened in the name of one spouse, but funded by both spouses. Contributions can be made to a spousal IRA even if one spouse does not have any income. The contribution limits for a spousal IRA are the same as for an individual IRA ($6,000 or $7,000 if age 50 or older).
Tax Implications
The tax implications of making IRA contributions as a married couple filing jointly are the same as for any other individual. Contributions are tax-deductible in the year they are made and any earnings on the contributions are tax-deferred until withdrawal. Withdrawals from an IRA account are subject to income taxes, and in some cases, may be subject to an additional 10% early withdrawal penalty.
Contribution Deadline
The deadline for making IRA contributions for the tax year 2023 is April 15, 2024. This means that married couples have until this date to make contributions to their IRA accounts for the 2023 tax year. It is important to note that the deadline for making Roth IRA contributions is the same as for traditional IRA contributions.
Rollover Contributions
In addition to making regular contributions to an IRA account, married couples may also be able to make rollover contributions. A rollover contribution is a contribution made to an IRA account from another retirement account such as a 401(k) or 403(b). The rules for rollover contributions are the same as for regular contributions, with the same annual contribution limits ($6,000 or $7,000 if age 50 or older).
Conclusion
Married couples filing jointly have the same IRA contribution limits as any other individual. The annual contribution limit for 2023 is $6,000 ($7,000 if age 50 or older) for each individual and $12,000 ($14,000 if both spouses are age 50 or older) for a married couple. In addition, catch-up contributions of up to $2,000 are allowed for those age 50 or older. The deadline for making contributions to an IRA account for the tax year 2023 is April 15, 2024.