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Posted by Jim McClaflin, EA, NTPI Fellow, CTRC

Understanding IRA Contribution Limits for 2022 vs. 2023

Understanding IRA Contribution Limits for 2022 vs. 2023

Individual Retirement Accounts (IRAs) offer individuals a valuable opportunity to save for retirement while enjoying certain tax benefits. However, it's crucial to stay informed about the contribution limits set by the Internal Revenue Service (IRS) to maximize the advantages of an IRA. This article will explore the IRA contribution limits for 2022 and 2023, highlighting the changes and key considerations.

IRA Contribution Limits for 2022

For the tax year 2022, the IRA contribution limits remain the same as the previous year. Individuals can contribute up to $6,000 to their IRAs or an equivalent amount if they are 50 years of age or older. This additional catch-up contribution of $1,000 is designed to help individuals accelerate their retirement savings as they approach retirement age.

It's important to note that the contribution limit is per person, not per account. Therefore, if an individual has multiple IRAs, the total contributions across all accounts cannot exceed the annual limit.

Types of IRAs:

Before diving deeper into the contribution limits for 2023, it's worth reviewing the different types of IRAs available:

  1. Traditional IRA: Contributions to a traditional IRA may be tax deductible, depending on an individual's income and participation in an employer-sponsored retirement plan. Earnings in a traditional IRA grow tax-deferred until withdrawal, at which point they are subject to income tax.

  2. Roth IRA: Contributions to a Roth IRA are made with after-tax income, meaning they are not tax-deductible. However, qualified withdrawals from a Roth IRA are entirely tax-free, including both contributions and earnings.

  3. SEP IRA: Simplified Employee Pension (SEP) IRAs are designed for self-employed individuals and small business owners. Contribution limits for SEP IRAs are subject to different rules, which this article will not cover.

IRA Contribution Limits for 2023

For the tax year 2023, the IRS has made a modest increase in the IRA contribution limits to account for inflation. The maximum annual contribution limits for traditional and Roth IRAs are set to rise to $6,500 for individuals under 50. For those aged 50 and above, an additional catch-up contribution of $1,000 remains available, bringing their total allowable contribution to $7,500.

Income Phase-Out Ranges:

While anyone can contribute to a traditional IRA regardless of income, eligibility to contribute to a Roth IRA is subject to income phase-out limits. These limits determine whether individuals can make the maximum contribution or only a reduced amount or if they are ineligible to contribute altogether.

For 2023, the income phase-out ranges for Roth IRAs are as follows:

  • Single or Head of Household: Individuals with a modified adjusted gross income (MAGI) under $125,000 can contribute the maximum amount. Contributions are gradually reduced between $125,000 and $140,000, after which eligibility phases out entirely.

  • Married Filing Jointly: Couples with a MAGI under $198,000 can make the maximum contribution. Contributions phase out between $198,000 and $208,000, with no eligibility above this threshold.

Note that these income thresholds are subject to change annually, and individuals are advised to consult the IRS guidelines or a tax professional for the most up-to-date information.

Important Considerations:

Contribution Deadlines

Contributions to an IRA for a specific tax year can be made up until the tax-filing deadline for that year, typically April 15 of the following year. However, it's always beneficial to contribute as early as possible to take advantage of the potential growth of investments.

Employer-Sponsored Retirement

  • Plans: Individuals who participate in an employer-sponsored retirement plan such as a 401(k) or 403(b) may be subject to different income phase-out ranges and deductible contribution limits. These factors may affect the tax advantages and eligibility to contribute to an IRA.

Penalties for Excess Contributions

It's crucial to avoid exceeding the contribution limits, as the IRS imposes a 6% penalty tax on excess contributions. To prevent this, keep track of all contributions made to your IRAs and consult with a tax professional if you have multiple accounts or need clarification on the limits.


Planning for retirement requires a thorough understanding of the IRA contribution limits set by the IRS. By staying informed about the changes in contribution limits between 2022 and 2023, individuals can make the most of their retirement savings. Remember to consider the different types of IRAs, income phase-out ranges, and other important factors discussed in this article. Consult with a tax professional for personalized advice and to ensure compliance with IRS regulations. Start saving early and take advantage of the available tax benefits to secure a financially comfortable retirement.



Jim McClaflin, EA, NTPI Fellow, CTRC
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