John M. Hoffman & Associates CPAs

Frequently Asked Tax Questions

Individual Retirement Accounts – IRAs

 

“What are the limits as to contribution amounts for IRAs?”

 

• For 2007 the limits are the lesser of your earned income (alimony counts as earned income for this calculation), or $4,000. This limit increases to $5,000 for 2008.

• A “catch-up” contribution for people age 50 or older by year’s end of up to $1,000 of additional contribution is allowed.

• Coverdell (Education IRA) is limited to $2,000 per individual (student).