It depends on what type of IRA it is. Almost anyone can contribute to a traditional IRA, provided you (or your spouse) receive taxable income and are under 70 ½ years of age. However, your contributions are only tax deductible if you meet certain qualifications. To learn more about these qualifications, see Who Can Contribute to a Traditional IRA?
Today, an IRA owner (or spouse) only needs eligible compensation to contribute to the traditional IRA. However, regardless of your age, you can still contribute to a Roth IRA and make rollover contributions to a Roth IRA or a traditional IRA. The upfront tax break is one of the key features that differentiates traditional IRA rules from Roth IRA rules, which do not allow a tax deduction for contributions. While the traditional IRA shares many features with its newer sister, the Roth IRA offers both tax incentives for saving for retirement and for early withdrawals under specific circumstances, each with different rules.
While it is ultimately the responsibility of the IRA owner to know whether they are eligible for an IRA contribution, redirecting it to the right resources in advance can save them time and money in the long run. Roth IRA contributions may be limited by the individual or couple’s modified adjusted gross income (MAGI).
