IRA Contribution Limits: What You Should Know

Louisiana REALTORS® • March 25, 2024

From your Member Benefit - LaCapitol Federal Credit Union

As the holidays end, Americans begin gearing up for tax season. This time of the year is essentially the eleventh hour to double check your finances so that everything will be in order for your 2024 tax filing.1 Individual retirement accounts, IRAs,2 should be included in that preparation. You’ll want to ensure that you’ve maxed out your contribution, consider catchup contributions if you haven’t, and align your finances to take advantage of the new adjusted IRA contribution limits for next year. Consult your tax professional to see what specific tax advantages apply to your situation.


What are Individual Retirement Accounts?

IRAs are savings accounts that let you save money for retirement and earn interest on it but offer some tax advantages that other savings accounts don’t. La Cap offers several IRA products that fall into the two categories: traditional IRAs and Roth IRAs. You can also view our current rates.


La Cap IRA products (available as Roth and Traditional) include:

•    Certificate Accounts3

•    Floating Rate Account4

•    Bonus IRA Account2


The most basic difference between the two is that with traditional IRAs, the money you save isn’t taxed until you withdraw it while Roth IRA contributions are funded with post-tax money, but qualified withdrawals are tax-free. Because these savings accounts have tax implications for account holders, they’re bound by annual IRA contribution limits that change each year as well as income and age guidelines.


2023 IRA Contribution Limits for Tax Season 2024

It is important to realize that even though you can have more than one IRA account — both a traditional IRA and a Roth IRA, for example — contribution limits are assigned to each individual. The annual contribution limit is an overall figure that applies to the total of all of your IRA accounts together, not each one.


For 2023, the contribution limit is $6,500 for individuals under 50. For individuals 50 or older, the contribution limit is $7,500. The limit for older individuals is $1,000 higher because it allows people who are closer to retirement to make catchup contributions that they probably couldn’t afford when they were younger. Catchup contributions can also help build a cushion against steadily rising living costs.


If you’re thinking that you don’t have time to come up with funds for a catchup contribution, the good news is that you have until Tax Day, April 15, 2024, to make a deposit that can count toward your 2023 IRA. Determining exactly how much you can contribute versus how much you might want to contribute depends on your income and the type of IRA. So, how much can you put in an IRA?


How Income Affects IRA Contribution Limits for 2023

For traditional IRAs, you’re allowed to contribute the full amount up to the contribution limit regardless of your income. However, Roth IRAs control how much you can save by tracking contribution limits with your modified adjusted gross income, also referred to as MAGI.


  • If you file as single, head of household or married filing separately, as long as your MAGI is less than $138,000, you can contribute the full amount. However, if your MAGI is $138,000 or more and less than $153,000, your contribution limit is reduced. If your MAGI is $153,000 or more, no contribution is allowed.
  • If you file as married filing jointly or as a widow/widower, as long as your MAGI is less than $218,000, you can contribute the full amount. However, if your MAGI is $218,000 or more and less than $228,000, your contribution limit is reduced. If your MAGI is $228,000 or more, no contribution is allowed.
  • If you file as married filing separately and lived with your spouse at any time during the year, as long as your MAGI is less than $10,000, you can contribute, but the limit will be reduced. If your MAGI is $10,000 or more, no contribution is allowed.


As a general rule, you cannot contribute more to an IRA than you earn or, if you’re married, your spouse’s earnings will cover.


How Tax Deductions Affect IRA Contribution Limits

While your earnings don’t affect whether you can contribute to a traditional IRA, your MAGI does affect whether you’ll be able to deduct the contributions you make to a traditional IRA from your taxes. Note that only traditional IRAs are eligible for deductions. Roth IRAs are not.


Deduction qualification tables for traditional IRAs assume that you, or your spouse, are covered by a retirement plan through your employer. If you aren’t, the tax deduction limits don’t apply, and you can deduct your entire contribution.


  • If you file as single or head of household, as long as your MAGI is $73,000 or less, you’re eligible for the full deduction. If your MAGI is more than $73,000 and less than $83,000, you’re eligible for a partial deduction. If your MAGI is $83,000 or more, you’re ineligible for a deduction.
  • If you file as married filing jointly and you are covered by your employer’s retirement plan, as long as your MAGI is $116,00 or less, you’re eligible for the full deduction. If your MAGI is more than $116,000 and less than $136,000, you’re eligible for a partial deduction. If your MAGI is $136,000 or more, you’re ineligible for a deduction.
  • If you file as married filing jointly and your spouse is covered by their employer’s retirement plan, as long as your MAGI is $218,000 or less, you’re eligible for the full deduction. If your MAGI is more than $218,000 and less than $228,000, you’re eligible for a partial deduction. If your MAGI is more than $228,000, you’re ineligible for a deduction.
  • If you file as married filing separately, as long as your MAGI is less than $10,000, you’re eligible for the full deduction. If your MAGI is $10,000 or more, you’re ineligible for a deduction.


IRA Contribution Limit Increases for 2024 and the 2025 Tax Season

Each year, the Internal Revenue Service adjusts limits for IRA contributions, typically raising both the contribution limits and the MAGI guidelines. For 2024, the IRS is raising the annual contribution limits by $500. If you’re under 50, you’ll be able to save up to $7,000, and if you’ll be 50 or older, you’ll be able to save up to $8,000.


Note that the IRS also updates and raises the MAGI thresholds for both Roth IRA contributions and traditional IRA tax deductions. For example, in 2024, all figures increase.


  • If you file your taxes as single or head of household, your MAGI must be less than $146,000 to make a full contribution to a Roth IRA. That’s $8,000 more than 2023’s figure.
  • If you file your taxes as married filing jointly, your MAGI must be less than $230,000 to make a full contribution to a Roth IRA. That’s $12,000 more than 2023’s figure.
  • If you file your taxes as single or head of household, your MAGI must be $77,000 or less to get the full tax deduction on a traditional IRA. That’s $4,000 more than 2023’s figure.
  • If you file your taxes as married filing jointly, your MAGI must be $123,000 or less to claim the full tax deduction on a traditional IRA. That’s $7,000 more than 2023’s figure.


The end of the year and start of the new year are busy seasons, but devoting time and attention to your savings now promises the gift of future financial security and independence. If you want to know more about investing in a Roth or traditional IRA, call our Member Services Line at 800.522.2748 or 225.342.5055 to be directed to our savings and investment officers. We offer competitive interest rates that can help you invest wisely. Check out our website, and see why being a member of a nonprofit credit union like La Capitol makes finding the best IRA account so much easier.


Disclosures

1 Consult your tax professional to see what specific tax advantages apply to your situation.


2 APY = Annual Percentage Yield. Bonus IRA is a term share account. La Cap may change the dividend rate for your account as determined by the credit union Board of Directors. The APY is available on new contributions made to your account this year. The maturity date is December 31 of the year the contribution was made. No minimum balance is required to open a Bonus IRA account or to obtain the disclosed APY. IRA transfers or rollovers from another financial institution or retirement plan do not qualify for this special Bonus IRA rate. Dividends earned are posted and compounded monthly. Applicable fees and conditions could reduce the earnings on your account. Substantial penalties for early withdrawal.


3 APY = Annual Percentage Yield. IRA Certificate Account is a term share account.  The Annual Percentage Yield is fixed at the time you make the initial deposit to open or renew the account, and will not change during the term of the Certificate. 

Dividends earned are posted and compounded monthly. Applicable fees and conditions could reduce the earnings on your account. Substantial penalties for early withdrawal.


4 APY = Annual Percentage Yield. IRA Floating Rate Account is a variable rate account with no maturity.  No minimum deposit is required to open this account or to obtain the disclosed Annual Percentage Yield. La Cap may change the dividend rate for your account as determined by the credit union Board of Directors.


Dividends earned are posted and compounded monthly. Applicable fees and conditions could reduce the earnings on your account. Substantial penalties for early withdrawal.

Now Accepting: 2027 At-Large Board of Directors Applications

By Louisiana REALTORS® • August 5, 2026
The Louisiana REALTORS® Board of Directors will elect six (6) LR At-Large Directors at its October 1st meeting. Qualifications and an application for the position can be found below.

New Wholesaling Law - Effective August 1

By Louisiana REALTORS® • August 3, 2026
As previously noted in our 2026 legislative session update, HB 468 by Rep. Troy Hebert was adopted with no opposition and was effective August 1, 2026, as Act 807. The Act amends portions of the Louisiana Real Estate License Law (La. R.S. 37:1430, et seq.) to regulate the practice of wholesaling with respect to residential property. Specifically, the Act establishes newly defined terms of “residential real property”, “wholesaler” and “wholesaling” (La. R.S. 37:1431(35) through (37)) and enacts La. R.S. 37:1448.5 to specifically address wholesaling of residential real properties, including required disclosures, written agreements, notices and deposits and also provides for enforcement of the new law. The Act does not prohibit real estate wholesaling. Rather, there are certain requirements for “wholesalers” solely with respect to “wholesaling” of “residential real property.” Each of those terms are defined below. The intent is to make sure that sellers (homeowners) understand the true nature of the wholesaling transaction. To accomplish that, the law requires wholesalers to clearly disclose whether they intend to assign, transfer, or market any rights they have under a purchase agreement for financial gain. The wholesaler must prominently disclose that intent along with advising the seller to seek legal advice before signing each contract and that the seller has the right to cancel the wholesaling contract for any reason and without penalty for at least five calendar days after the execution of the contract. The law expressly requires that each wholesaling contract include the following: "NOTICE REQUIRED BY LOUISIANA LAW: You may cancel this contract at any time before 11:59 PM of [Insert Date]. [Insert Name of Wholesaler] CANNOT ask you to sign or have you sign any cash sale, conveyance or deed, or any other document until your right to cancel this contract has ended. See the attached notice of cancellation form for an explanation of this right. It is advisable that you find your own attorney before signing the contract. The law requires this contract to contain the entire agreement. You should not rely upon any other written or oral agreement or promise." The “notice of cancellation form” referenced above has been published by the Louisiana Real Estate Commission as the “Wholesaling Residential Real Property Mandatory Cancellation Notice” and can be found here . Failure to include that notice renders the contract void and terminable by the seller and in the event of such a termination due to failure to include the notice or other non-compliance by the wholesaler, the seller will receive the deposit. However, if the contract is terminated within the 5-day rescission period, the wholesaler receives the deposit in full. Notably, the Act requires a minimum deposit equal to at least 1% of the purchase price, with funds properly held in escrow, in all wholesaling transactions. In addition, wholesalers are also prohibited from: (a) acting or purporting to act on behalf of the seller whether pursuant to a mandate, power of attorney, or otherwise; (b) representing himself as holding any license or certification or being a member of a licensed profession without the license or certification; (c) placing any lien or other encumbrance on the property; and (d) engaging in any deceptive or unfair trade. Louisiana REALTORS ® is proud to have supported this Act to promote transparency and consumer protection in the real estate industry while allowing for continued investment in our communities through real estate transactions. Definitions: "Residential real property" means real property consisting of one or not more than four residential dwelling units, which are buildings or structures each of which is occupied or intended for occupancy as single family residences. "Wholesaler" means any person or entity that is either engaged in or intends to engage in the wholesaling of residential real property. "Wholesaling" means securing, negotiating, or facilitating the purchase or sale of residential real property with the purpose of transferring, assigning, or selling a contractual right to purchase or any other equitable interest in the residential real property, whether directly or indirectly, for financial gain. The marketing for sale of the contractual rights or other equitable interests constitutes a presumption that the person or entity marketing or selling the rights or interests is engaged in wholesaling. "Wholesaling" includes but is not limited to the following: (a) Entering into a contract to purchase residential real property with the intent of assigning or selling the contractual rights to another party before taking possession or legal ownership of such residential real property. (b) Simultaneously consummating or closing two separate transactions relative to the same residential real property, including one transaction with the original owner and seller of the residential real property and another transaction with the end buyer, without the purchaser providing all funds needed to close the sale transaction with the original owner and seller and without the intent to reside in, occupy, or otherwise materially improve the residential real property.

Consumer Guide Update: Seller Handoff Checklist

By Louisiana REALTORS® • July 16, 2026
NAR is sharing its latest consumer guide, Seller Handoff Checklist . Sellers can create a smooth transition for the new owners using the new one-page guide. It offers a handy checklist of information and resources that sellers can pass along—from appliance manuals to paint colors to garbage pickup schedules—as well as suggestions for goodwill gestures that will help buyers feel they made a great purchasing decision. As a reminder, all guides in this series are available for download—in both English and Spanish—on facts.realtor . Please allow up to two weeks for the Spanish version of the latest resource to be translated and uploaded. For ease of reference, below is a list of the most recent guides: NEW: Seller Handoff Checklist Defining Home Buying Needs vs. Wants  10 Tips For Unpacking Smartly After A Move UPDATED: Multiple Listing Services Overcoming Roadblocks to a Sale or Purchase Thank you for your continued engagement with the “Consumer Guide” series and for sharing the resources with prospective clients to ensure they have the information they need to find success in their home buying or selling journey. Remember that these guides are for informational purposes only and are not meant to enact or change any existing NAR policy. Check out the next consumer guide on condominium insurance.
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