For the year 2015-2017, the maximum contribution you can make to a traditional or roth IRA is $5,500.00 or $6,500.00 (if 50 or older) or your taxable contribution for the year. However, this limit does not apply to rollovers or qualified reservist payments.

Some things to be aware of with the separate plans are:

  • You can't make regular contributions to a traditional IRA if you are older than 70 1/2. You can still make contributions to a Roth IRA regardless of age.
  • You can make rollover contributions to a Roth or traditional IRA regardless of age.

Taxes on excess contributions occur when:

  • You contribute more than the contribution limit (this year $5,500.00 per person or $6,500.00 per person if over 50).
  • Make a regular contribution to a traditional IRA over age 70 1/2.
  • Make an improper rollover to an IRA.

Excess contributions are taxed at a 6% rate per year as long as the contributions remain in the IRA.

Traditional and Roth IRAs detail from IRS site

 

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