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IRA contribution limits & Traditional IRA deduction limits for 2016

IRA contribution limits
The maximum amount you can contribute to a traditional IRA or Roth IRA in 2016 is $5,500 (or 100% of your earned income, if less), unchanged from 2015. The maximum catch-up contribution for those age 50 or older remains at $1,000. (You can contribute to both a traditional and Roth IRA in 2016, but your total contributions can’t exceed these annual limits.)

Traditional IRA deduction limits for 2016
The income limits for determining the deductibility of traditional IRA contributions in 2016 are unchanged, except for one instance: if you’re not covered by an employer plan but your spouse is, and you file a joint return, you can fully deduct your IRA contribution in 2016 if your MAGI is $184,000 or less (up from $183,000 in 2015).

If your 2016 federal income tax filing status is: Single or head of household, your IRA deduction is reduced if your MAGI is between: $61,000 and $71,000. Your deduction is eliminated if your MAGI is: $71,000 or more.

If your 2016 federal income tax filing status is: Married filing jointly or qualifying widow(er)*, your IRA deduction is reduced if your MAGI is between $98,000 and $118,000 (combined). Your deduction is eliminated if your MAGI is $118,000 or more (combined).

If your 2016 federal income tax filing status is: Married filing separately, your IRA deduction is reduced if your MAGI is between $0 and $10,000. Your deduction is eliminated if your MAGI is $10,000 or more.

*If you’re not covered by an employer plan but your spouse is, your deduction is limited if your MAGI is $184,000 to $194,000, and eliminated if your MAGI exceeds $194,000.

The full document with Roth IRA and Employer Retirement Plan limits is available to subscribers at http://www.foremostadvice.com.

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