Annual contribution limits for IRAs are set by the IRS and change most years based on inflation

The IRS caps how much money you can deposit into an IRA in a single tax year. For 2024, the limit is $7,000 if you are under 50, and $8,000 if you are 50 or older. For 2025, those limits are $8,000 and $9,000. These numbers shift annually — the IRS rounds them to the nearest $500 when inflation crosses certain thresholds, so the limit you see one year may not be the limit next year.

The limit applies to the total you deposit across all IRAs you own, not to each account separately. If you have a traditional IRA and a Roth IRA, money you put into either one counts toward the same annual ceiling. Exceeding the limit triggers a 6 percent penalty tax on the overage each year it sits in the account, so knowing your limit before you deposit matters.

Key Takeaways

  • The annual IRA deposit limit for 2024 is $7,000 (or $8,000 if you are 50 or older), and for 2025 it is $8,000 (or $9,000 if you are 50 or older).
  • The limit covers all your IRAs combined — a traditional IRA and a Roth IRA share the same annual ceiling, not separate ones.
  • You can only deposit money you earned as income in that tax year; you cannot deposit more than your total earned income, even if you have room under the IRS limit.
  • Deposits must be made by the tax filing deadline for that year, usually April 15 of the following year, though some employers allow contributions until December 31.
  • Exceeding the limit results in a 6 percent penalty tax on the overage each year it remains in the account until you withdraw it.

How the limit connects to your income

You cannot deposit more into an IRA than you earned in that tax year. If you made $5,000 in 2024, your IRA deposit limit for that year is $5,000, not the full $7,000 the IRS allows. This applies whether the income came from a job, self-employment, or other sources the IRS counts as earned income.

Passive income — dividends, interest, rental income, or investment gains — does not count toward this calculation. Only money you earned through work opens the door to an IRA deposit. If you are married and file jointly, your spouse's income can support their own IRA deposit but not yours, unless you are a nonworking spouse with a spousal IRA, which has its own rules.

Catch-up contributions for people 50 and older

The IRS allows an extra deposit if you are 50 or older. This catch-up contribution adds $1,000 to your annual limit, bringing it to $8,000 for 2024 (or $9,000 for 2025). You become may be able to access the year you turn 50, and the extra room remains available every year after that.

You must still have earned income equal to the full amount you want to deposit, including the catch-up portion. If you turned 50 in 2024 and earned $8,500 that year, you can deposit the full $8,000. If you earned $7,500, your limit drops to $7,500 even though the IRS would otherwise allow $8,000.

When you can make deposits and what counts as "on time"

You can deposit money into an IRA at any point during the tax year or up until the filing deadline for that year. For the 2024 tax year, the deadline is April 15, 2025. Some employers and financial institutions allow deposits through December 31 of the tax year itself, but the IRS deadline is what matters legally — deposits after April 15 apply to the next tax year.

If you are self-employed or own a business, you may have until October 15 of the following year if you file an extension, but the deposit itself must still be made by the original April 15 deadline unless you request an extension from the IRS before that date. Deposits made after the deadline automatically count toward the next tax year's limit.

Penalties for depositing too much

If you deposit more than the IRS limit for a given year, the overage is subject to a 6 percent excise tax each year it remains in the account. A $1,000 overage costs $60 in tax the first year, another $60 the second year, and so on until you remove it. The penalty applies to the overage amount, not to the earnings it generates.

To fix an overage, you must withdraw the excess amount plus any earnings it produced. If you withdraw the overage and its earnings before you file your tax return for that year, the IRS may waive the penalty if the overage was unintentional. After the return is filed, you will owe the penalty for every year the overage sat in the account. Your IRA custodian can help you calculate what to withdraw and when.

How limits differ between traditional and Roth IRAs

The annual deposit limit is the same whether you use a traditional IRA or a Roth IRA — $7,000 for 2024, $8,000 for 2025 (or the catch-up amounts if you are 50 or older). The difference is not in how much you can put in, but in whether you get a tax deduction now and pay taxes later (traditional) or pay taxes now and withdraw tax-free later (Roth).

What does change between the two is whether you can make a full deposit based on your income. Roth IRAs have income limits that can reduce or eliminate your deposit room if you earn above a certain threshold. Traditional IRAs do not have income limits for deposits, but if you or your spouse have a workplace retirement plan, your ability to deduct the deposit on your taxes may phase out. The deposit limit itself stays the same; what changes is the tax treatment.

Deposits from rollovers and transfers do not count toward the limit

Money you move from one IRA to another IRA, or from a workplace retirement plan like a 401(k) into an IRA, does not count against your annual deposit limit. These are called rollovers or transfers, and they have their own rules separate from regular deposits.

You can roll over as much as you want from a 401(k), 403(b), or other may have access to plan into an IRA without hitting the annual limit. Similarly, moving money between two IRAs you own does not use up your deposit room. Only money you contribute directly from your paycheck or bank account counts toward the $7,000 or $8,000 ceiling.

Frequently Asked Questions

Can I deposit money into an IRA after I turn 70?

Yes. The IRS removed the age limit for traditional IRA deposits in 2023. You can deposit into a traditional IRA at any age as long as you have earned income that year. Roth IRAs have no age limit either. However, you must begin taking required minimum distributions from a traditional IRA at age 73 (as of 2023), which is separate from your ability to make new deposits.

What happens if I deposit more than I earned that year?

The amount over your earned income is treated as an excess contribution and is subject to the 6 percent penalty tax each year it stays in the account. You must withdraw the overage plus any earnings it generated to stop the penalty from accruing. Contact your IRA custodian to request a withdrawal of the excess.

Do employer contributions to my IRA count toward the annual limit?

No. If your employer makes deposits into an IRA on your behalf (sometimes called a SEP-IRA or SIMPLE IRA), those deposits follow different rules and limits. Your own contributions still cannot exceed the standard annual limit, but employer contributions are separate.

Can I deposit money for last year's taxes if I missed the deadline?

No. Once the April 15 deadline passes, deposits go toward the current tax year's limit, not the previous year. If you missed the deadline for a prior year, you cannot make up that deposit. You can only deposit for the current year and future years.

If I have both a traditional and Roth IRA, do I get two separate limits?

No. The $7,000 or $8,000 limit applies to your total deposits across all IRAs you own in a single year. If you deposit $4,000 into a traditional IRA, you can only deposit $3,000 into a Roth IRA that same year (assuming you are under 50). The limit is per person, not per account.