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2012 Traditional And Roth IRA Contribution Limits And Phase Outs

By Peter Anderson 2 Comments - The content of this website often contains affiliate links and I may be compensated if you buy through those links (at no cost to you!). Learn more about how we make money. Last edited November 19, 2023.

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A few months back the IRS released their 2012 IRA contribution limits and deduction phaseouts. If you have a traditional or Roth IRA, you should keep a close eye on the limits every year because every once in a while we’ll see an increase in allowed contribution amounts or in the income phaseouts.  When that happens, you’ll want to increase your contribution amounts, or adjust  your pre-tax giving so that you can fully take advantage of what the current rules are.

For the 2012 tax year the allowed contribution amounts haven’t changed at all.  The income phaseout limits have seen some small increases, however.

2012 Income Phaseouts and Contribution Limits

2012 Contribution Limits For Roth & Traditional IRA

2012 saw the contribution limit  both Roth and Traditional IRAs stay at $5,000 for people under the age of 50.  If you are older than 50 this year you are able to make catch up contributions to your account of $1,000 – which means your limit is actually $6,000.

One thing to remember is that the Roth and Traditional IRA contribution limit is shared, so while you can contribute to both account types in one year, your $5,000 limit is a combined limit.  So if you contribute $3,000 to your Roth IRA, you could only contribute $2,000 to your traditional IRA (bump that up by $1,000 if you’re over 50).

Here’s a table showing the 2012 Traditional and Roth IRA contribution limits, along with the limits in years past.

YearAge 49 and BelowAge 50 and Above
2002-2004$3,000$3,500
2005$4,000$4,500
2006-2007$4,000$5,000
2008-2012$5,000$6,000
2013-2018$5,500$6,500
2019-2022$6,000$7,000
2023$6,500$7,500
2024$7,000$8,000

AGI Based Income Phaseouts For  IRAs  In 2012

Both Roth and traditional IRAs have income phaseouts.  What that means is once you reach a certain level of income the amount of deductible contributions you can deduct gets reduced.

For Roth IRAs single taxpayers with an annual Modified Adjusted Gross Income (MAGI) over $110,000 begin to see their allowable deduction drop until at $125,000 it goes away completely. The limits for Married Filing Jointly investors are $173,000-$183,000.

For Traditional IRAs single taxpayers with an annual Modified Adjusted Gross Income (MAGI) over $58,000 begin to see their allowed deduction drop until at $68,000 it goes away completely. The limits for Married Filing Jointly investors are $92,000-$112,000.

Roth IRA Income Limits For Contributions (2024)Contributions are reduced if income is above this amountContributions are not available if income exceeds this amount
Single/Married Filing Separate IF you didn't live together during the year.$146,000$161,000
Married Filing Jointly or qualifying widow or widower.$230,000$240,000
Married filing separately IF you lived with your spouse at any point during the year.$0$10,000

Tax Day Of The Following Year Is Contribution Cutoff

One thing a lot of people don’t realize is that if they haven’t already contributed the full amount to your Traditional IRA or Roth IRA for the 2011 tax year, they can still open a Roth IRA or a traditional IRA and contribute to the accounts up until tax day.  This year tax day falls on April 17th, 2012 because of a government holiday.

If you do make a contribution in 2012 before tax day, make sure you specify which tax year the contribution is being made for.

Keep An Eye On Phaseout Limits

One reason why you’ll want to keep an eye on the income based phaseout limits is that your ability to contribute to your accounts is reduced if you reach a certain income level.    If you know you’re close to reaching an income limit, try reducing your taxable income by contributing to an account like a 401k, reducing your taxable income and allowing yourself to contribute more to your IRA as well.

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Last Edited: 19th November 2023 The content of biblemoneymatters.com is for general information purposes only and does not constitute professional advice. Visitors to biblemoneymatters.com should not act upon the content or information without first seeking appropriate professional advice. In accordance with the latest FTC guidelines, we declare that we have a financial relationship with every company mentioned on this site.

This article is about: Investing, Retirement

About Peter Anderson

Peter Anderson is a Christian, husband to his beautiful wife Maria, and father to his 2 children. He loves reading and writing about personal finance, and also enjoys a good board game every now and again. You can find out more about him on the about page. Don't forget to say hi on Pinterest, Twitter or Facebook!

Comments

    Share Your Thoughts: Cancel reply

  1. Jenna, Adaptu Community Manager says

    Thanks for explaining the phase outs!

    Reply
  2. Mac Hildebrand says

    I’m certainly not personally close to any phaseouts or limits, but this was helpful in general for me to contemplate planning for the future and different options for reducing taxable income. Thanks

    Reply
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