There is still time left to contribute to 2011 Traditional and Roth IRAs. You have until you file your 2011 taxes to make that contribution. Federal taxes for 2011 will be due on April 17, 2012, so this is the deadline for establishing your 2011 IRA. If you file for an extension, your IRA deadline will not be extended, so ensure you don’t miss the contribution deadline.
The contribution limit for 2012 IRAs is not increasing. Like 2011, you can contribute up to $5,000 total between Traditional and Roth IRAs. Taxpayers over the age of 50 can make an additional contribution of $1,000 between both types of IRAs for a total of $6,000.
| Year | Under Age 50 | 50 and Older | Standard Deadline | Open an IRA | |
|---|---|---|---|---|---|
| 2009 | $5,000 | $6,000 | April 15, 2010 | E*TRADE | ShareBuilder |
| 2010 | $5,000 | $6,000 | April 18, 2011 | E*TRADE | ShareBuilder |
| 2011 | $5,000 | $6,000 | April 17, 2012 | E*TRADE | ShareBuilder |
| 2012 | $5,000 | $6,000 | April 15, 2013 | E*TRADE | ShareBuilder |
Contributions to a Traditional IRA are tax deductible, but depending on your income and employment situation, the amount that can be deducted from your income varies. In 2012, for those who are covered by a retirement plan at work, single taxpayers or heads of household can deduct the full amount of their contribution if their modified adjusted gross income is up to $58,000. Between that amount and $68,000, taxpayers can take a partial deduction. At $68,000, the deduction is completely phased out.
Married taxpayers filing jointly (and qualified widows and widowers) can take the full deduction up to a modified adjusted gross income to to $90,000. The deduction phases out through $110,000. Married individuals filing separately can only take a partial deduction up to $10,000 in income.
If you are not covered by a retirement plan at work, the limits are more favorable. Single taxpayers, heads of households, and qualifying widows and widowers can deduct their full Traditional IRA contribution, regardless of income. Married taxpayers filing jointly can also deduct their full contribution unless their spouse is covered by a retirement plan at work. If that is the case, with a modified adjusted gross income of $173,000, the deduction phases out until the taxpayers reach an income of $183,000.
Taxpayers who are married by file separately can take a partial deduction through a modified adjusted gross income of $10,000, at which point the deduction is completely phased out.
Updated January 10, 2012 and originally published December 20, 2010. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.
Rank: Platinum
![2357032474_5761f2fb6a_b[1]](http://www.consumerismcommentary.com/uploadedfiles/wp-content/uploads/2010/12/2357032474_5761f2fb6a_b1-300x202.jpg?139d23 "Life After Salary: Saving for Retirement"){kind=small}
{ 143 comments… read them below or add one }
← Previous Comments
my company had a retirement for the employees in witch they froze, when i became 75 i retired and am getting $70.00 a month from jp morgan. I would like to go back and work for this co. an i am not getting enough income to live on. can this be done.
My father is 70 years old. He has been retired for 2 years and has most of his money in traditional IRA’s. I am trying to start up a business in which my father wants to help me with, however he is worried sick that he we be taxed upto 30% if he takes out $100,000. Is there any way around avoidiing the extra taxes and sending him into a higher tax bracket? All the money will be going towards a business investment.
← Previous Comments