Can an individual contribute to both a Roth IRA and a Traditional IRA in the same year?

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Yes, an individual can contribute to both a Roth and traditional IRA up to a maximum of $5,500 ($6,500 if over age 50), but not each. For example, you could contribute $3,000 to a Roth IRA and $2,500 to a traditional IRA (for a total of $5,500 if you're under age 50). However, IRA contributions (whether deductible or non-deductible) are only able to be made with earned income (money derived from paid work). Earned income includes:

  • Wages
  • Salary
  • Commission
  • Bonuses
  • Tips

Even if you have earned income, and depending if you're single or married, corresponding income limits will determine if the traditional IRA is fully deductible, partially, or completely phased out.

If you're single or married and not covered by an employer-sponsored plan, your contributions will be fully deductible no matter what your income is. However, if you're married and both of you are covered by an employer-sponsored plan, contributions can be deducted in accordance with your Modified Adjusted Gross Income (MAGI). In 2016:

Single limits:

  • If your MAGI is $61,000 or below, your contribution is fully deductible
  • If your MAGI is more than $61,000 but less than $71,000, your contribution starts to phase out
  • If your MAGI is more than $71,000, your contribution is phased out completely

Married limits:

  • If your MAGI is $98,000 or below, your contribution is fully deductible
  • If your MAGI is more than $98,000 but less than $118,000, your contribution starts to phase out
  • If your MAGI is more than $118,000, your contribution is phased out completely

If you're married and your spouse is covered by an employer-sponsored plan, but you are not, the deduction phase-out range is $184,000-$194,000.

Roth IRA contributions are also in accordance with your MAGI. In 2016:

Single limits:

  • If your MAGI is $117,000 or below, you can make a contribution
  • If your MAGI is more than $117,000 but less than $132,000, you can make a reduced contribution
  • If your MAGI is more than $132,000, you are ineligible to make a contribution

Married limits:

  • If your MAGI is $184,000 or below, you can make a contribution
  • If your MAGI is more than $184,000 but less than $194,000, you can make a reduced contribution
  • If your MAGI is more than $194,000, you are ineligible to make a contribution

Finally, if you are 70 ½ or older, only non-deductible Roth IRA contributions are able to be made.

If you have any further questions, I'd be happy to help.

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