2025 IRA contribution limits: $7,000 for those under 50, $8,000 for age 50+ (includes $1,000 catch-up).

This applies combined to Traditional and Roth IRAs - if you contribute $4,000 to Traditional, you can only add $3,000 to Roth.

Must have earned income at least equal to contribution amount.

Spousal IRA allows non-working spouse to contribute based on working spouse income.

Roth IRA phase-out ranges for 2025: Single filers: $150,000-$165,000 MAGI (partial contributions), $165,000+ (ineligible).

Married filing jointly: $236,000-$246,000 (partial), $246,000+ (ineligible).

Married filing separately: $0-$10,000 (always phases out).

Above limits? Use backdoor Roth: contribute to non-deductible Traditional IRA, immediately convert to Roth.

Works if you have no other pre-tax IRA balances.

Deductibility depends on workplace retirement plan coverage and income.

Covered by 401k/403b: Single $79,000-$89,000 phase-out (2025), Married $126,000-$146,000.

Not covered but spouse is: $236,000-$246,000 phase-out.

No workplace plan: fully deductible regardless of income.

If non-deductible, consider Roth instead for tax-free growth.

Track non-deductible contributions on Form 8606 to avoid double taxation.

Choose based on current vs future tax rates: Traditional IRA: Deduct now, pay taxes in retirement.

Better if current tax rate >25% or expect lower retirement income.

Roth IRA: No deduction, tax-free withdrawals.

Better if young (30+ years growth), current rate <22%, or expect higher retirement income.

Best strategy: diversify with both for tax flexibility.

Consider Roth if eligible - income limits make it valuable option.

IRA contribution deadline: Tax filing deadline (April 15, 2026) for 2025 contributions.

You have 15.5 months total - January 1, 2025 through April 15, 2026.

Can contribute for 2025 even after 2025 ends, just specify tax year.

Extensions do NOT extend IRA deadline - must contribute by April 15 even if you file in October.

Early contributions benefit from longer compound growth.

Excess contributions incur 6% penalty tax annually until corrected.

Fix excess contributions by: Remove excess plus earnings before tax deadline (no penalty), Recharacterize to other IRA type if eligible, Apply excess to next year contribution.

Example: $8,000 contributed but only $7,000 eligible = $1,000 excess = $60/year penalty until withdrawn.

File Form 5329 with tax return.

Check eligibility before contributing to avoid penalties.