IRA Funding Season

If you are like many of our clients, you like to make your IRA and Roth IRA contributions once a year. There are many different rules regarding these contributions and I’m going to review a couple of them to help you simplify the process.

First of all, the government gives us a small window of time from January 1 through April 15 during which we can actually make contributions in the current calendar year for last year. So if you forgot to make your 2014 full contribution, it’s not too late to get it in. Actually, you could even contribute after April 15 if you file an extension on your taxes, but that’s getting into it more deeply than I’d like to at this point.

Before you can make contributions to an IRA or a Roth IRA, you must qualify to do so. To make a contribution, you need to have earned income – this could be anything from payment for babysitting services that you claim, to working at a restaurant, to punching the clock over at the truck and bus plant. Now that you have earned income, there are a few other rules to consider. If you have the ability to contribute to a 401K plan or other qualified savings account at your place of employment, you could be unable to make deductible contributions to your IRA if you make too much money. The graph below includes the income levels provided on Fidelity Investments’ website at

Roth and Traditional IRA contribution limits How much you can contribute for each tax year 2014 2015

2014 2015
Age 49 & Under 100% of compensation, up to $5,500 100% of compensation, up to $5,500
Age 50 & Older Additional $1,000 Additional $1,000


To be eligible to make a contribution to a Roth IRA or a deductible contribution to a Traditional IRA, an individual’s modified adjusted gross income (MAGI) must be less than a stated amount, depending on tax-filing status. Here are the MAGI limits for 2014 and 2015:

Roth IRA modified adjusted gross income phase-out ranges

The income ranges in which you can make a partial contribution to a Roth IRA

2014 2015
Single Individuals $114,000-$129,000 $116,000-$131,000
Married, filing joint returns $181,000-$191,000  $183,000-$193,000


Traditional IRA modified adjusted gross income limit for partial deductibility
The income ranges in which you can make a partially deductible Traditional IRA contribution

2014 2015
Single  $60,000-$70,000 $61,000-$71,000
Married, filing joint returns $96,000-$116,000   $98,000-$118,000
Married, filing separately  $0-$10,000 $0-$10,000
Non-active participant spouse (i.e., those with spouses who earn
$181,000-$191,000 $183,000-$193,000 


So, as we approach that April 15 deadline for 2014 contributions, it may make sense to consult with your financial advisor and your tax advisor regarding your personal tax situation to ensure that you are utilizing contributions to your fullest advantage. Also, if you are lucky enough to make more than the allowable amount to contribute to a Roth IRA, you may still be able to get that funded.

I wish you all a Happy IRA Funding Season and a safe and happy St. Patrick’s Day! ♦

800.338.4586 The Durant 607 E 2nd Ave., Ste. 100 Flint, MI 48502 Securities offered through Sigma Financial Corporation, member FINRA/SIPC. Investment advisory services offered through SPC, a registered investment advisor. OLV Investment Group is independent of Sigma Financial Corporation and SPC.


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