There is no income limit for contributing to a Traditional IRA in 2023. Meaning, as long as you have at least $6,500 of earned income for the year, you can contribute the maximum $6,500 to your Traditional IRA in 2023 (or $7,500 if you are 50 years of age or older). This contribution limit is a $500 increase from the 2022 limit.
While the income limit (or lack thereof) remains unchanged from 2022 to 2023, what has increased are the phase‑out ranges for deducting your IRA contributions.
In 2023, single/head of household filers who are covered by an employee-sponsored plan, and who have a modified adjusted gross income of less than $73,000, can fully deduct their IRA contribution. If their MAGI is more than $73,000, but less than $83,000, they can partially deduct their contribution. More than $83,000? No deduction.
If married filing jointly and one or both spouses are covered by an employee-sponsored plan, the income limits for deductibility kick in. I’m a fan of this NerdWallet chart showing the full breakdown.
As was the case in 2022, if you are a single filer or married filing jointly, and neither you nor your spouse are covered by an employee-sponsored plan, you can fully deduct your 2023 IRA contribution.
Again, you cannot contribute to an IRA more than you earn that year. So not until you earn $6,500 can you contribute the full $6,500 to your IRA. If you’re contributing to a Spousal IRA, the minimum amount the income-earning spouse needs to make in order to max each IRA is $13,000 ($15,000 if both spouses are 50 or older).
ABOUT THE AUTHOR
FINANCIAL ADVISOR & CLIENT SERVICE SPECIALIST
Polly Price is a Financial Advisor and Client Service Specialist for Walkner Condon Financial Advisors. She supports the team of financial advisors with clients in Madison and around the country.
You should always consult a financial, tax, or legal professional familiar about your unique circumstances before making any financial decisions. This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns. Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost.