2024-2025 IRA Contribution Limits

Contributing to an IRA is simple, but it’s essential to be mindful of the annual contribution limits set by the IRS.

However, you may also be able to fund your account through two additional methods:

• Transfers: This allows you to move funds from an existing IRA into your self-directed IRA without taxes or penalties.
• Rollovers: If you’re moving funds from a 401(k), 403(b), or another employer-sponsored plan, a rollover is another way to fund your self-directed IRA.

Contributions limits may vary annually, depending on the type of account you have. The IRS releases new contribution limits for all plans including traditional IRAs, Roth IRAs, SEP and SIMPLE plans, ESAs, and HSAs every year. Check out the current contribution limits here. 

Contributions to a traditional IRA may be tax-deductible depending on your income, filing status, and whether you (or your spouse, if married) are covered by a retirement plan at work.

• Fully deductible if neither you nor your spouse are covered by a retirement plan at work, regardless of income.
• Partially deductible or non-deductible if either you or your spouse are covered by a workplace retirement plan and your income exceeds certain thresholds.

Contributions to a Roth IRA are not tax-deductible. However, qualified withdrawals during retirement are tax-free.

Yes, you can contribute to both a traditional IRA and a Roth IRA if you’re covered by a retirement plan at work, but income limits may affect your contribution or its deductibility.

• You can contribute to a traditional IRA even if you’re covered by a retirement plan at work. However, the ability to deduct your contributions on your tax return may be limited based on your income and filing status.
• You can contribute to a Roth IRA if your income falls within the IRS limits.

If you want to set up an IRA for your spouse, you can contribute up to the same limits as for yourself, assuming your spouse qualifies under IRS rules. For this to apply, you and your spouse must file a joint tax return, and you must have enough earned income to cover the contributions for both you and your spouse.

Opening an IRA with Entrust is easy and can be completed online in as little as 10 minutes. Click here to get started or schedule a free consultation with one of our IRA experts to discuss your financial goals.

Contributions limits may vary year over year. The IRS releases new contributions limits every year. Check out the current SEP IRA contributions limits here. 

Contributions limits may vary year over year. The IRS releases new contributions limits every year. Check out the current SEP IRA contributions limits here.

Yes, in a SEP IRA, you must contribute the same percentage of salary for all eligible employees, including yourself. This rule ensures fairness across the plan, so if you decide to contribute 10% of your own salary to your SEP IRA, you must also contribute 10% of each eligible employee’s salary to their respective SEP IRAs.

Yes, if you participate in a SEP plan, you may still be able to make tax-deductible contributions to a traditional IRA. However, the ability to deduct your traditional IRA contributions will be subject to income limits based on your modified adjusted gross income (MAGI) and filing status. These limits apply because you are covered by an employer-sponsored retirement plan (the SEP IRA). If your income exceeds certain thresholds, the amount you can deduct from your traditional IRA contributions may be reduced or eliminated.

No, SEPs are funded by employer contributions only. Catch-up contributions apply only to employee elective deferrals.

No, you are not required to contribute every year. Contributions to a SEP plan are discretionary, allowing you to decide each year whether you wish to make a contribution or not.

Yes, you must contribute to a SEP IRA for a participant who is no longer employed on the last day of the year if they meet the eligibility requirements. Under SEP IRA rules, contributions must be made for all eligible employees, including those who terminated employment before the end of the year.

Yes, you can contribute to the SEP IRA of a participant over the age of 73. There are no age limits for contributions to a SEP IRA, and employers are required to make contributions for all eligible employees, including those over the age of 73. However, once the participant reaches age 73, required minimum distributions (RMDs) must begin, even if they are still working.

Employers may deduct all SEP IRA contributions on their business tax return, unless the business owner is self-employed. For self-employed individuals, the calculation is slightly more complex, as they must account for their net earnings and contributions for themselves.

No, contributions to employees’ SEP IRAs are not included in their gross income.

Opening a SEP IRA with Entrust is easy and can be completed online in as little as 10 minutes. Click here to get started or schedule a call with one of our IRA experts to discuss your options.

There are two main types of contributions that can be made to a SIMPLE IRA plan:

• Employee Contributions (Salary Deferral Contributions): Employees can choose to defer a portion of their salary into the SIMPLE IRA.
• Employer Contributions: Employers must contribute to their employees’ SIMPLE IRAs in one of two ways:
  • Matching Contributions: Employers can match employee contributions dollar-for-dollar, up to 3% of the employee’s compensation.
  • Non-Elective Contributions: Alternatively, employers can choose to contribute 2% of each eligible employee’s compensation, regardless of whether the employee makes contributions.
    

Both types of contributions are tax-deferred, meaning they reduce taxable income and grow tax-free until withdrawn in retirement.

A salary reduction contribution is an amount that an employee chooses to have contributed to their SIMPLE IRA instead of receiving it as part of their regular paycheck. Employers must allow employees to specify the amount they want to contribute, either as a percentage of their salary or a set dollar amount. The only limit employers can apply to these contributions is the annual contribution limit set by the IRS.

To find the SIMPLE IRA deferral limits for the current year, visit our contribution limits page.

No, you cannot suspend or change your employer matching contributions to a SIMPLE IRA plan in the middle of the year. Employers are required to provide employees with a notice at the beginning of the year outlining the matching contributions, and those commitments must be upheld for the entire year.

Yes, a SIMPLE IRA plan cannot impose a requirement that employees must be employed on the last day of the year to receive contributions. If an employee is eligible for the plan, they are entitled to receive their share of any contributions, even if they quit, pass away, or leave the company before the contribution is made.

Yes, in fact, you must. Employees may not be excluded from participating in a SIMPLE IRA plan based solely on their age.

For a SIMPLE IRA plan, matching and nonelective contributions must be made by the due date of the employer’s tax return, including extensions. This ensures that contributions are timely and comply with IRS regulations.

You may deduct all contributions made to your employees' SIMPLE IRAs on your tax return.

Opening a SIMPLE IRA with Entrust is easy and can be completed online in as little as 10 minutes. Click here to get started or schedule a call with one of our IRA experts to discuss your options.

Contribution limits may vary from year to year. Check out the current individual 401(k) contributions limits here. 

No, there is no required minimum contribution to an individual or solo 401(k). You can choose not to contribute in a given year or make smaller contributions based on your financial situation.

An individual or solo 401(k) is designed for self-employed individuals or small business owners with no full-time employees, except for the owner and their spouse. Eligible contributors include:

1. Self-employed individuals with any business structure (sole proprietors, LLCs, partnerships, corporations).
2. Business owners with no employees other than themselves and potentially their spouse.
   

Individual 401(k) contributions can be tax-deductible, but it’s important to note the distinction between different types of contributions:

• Employee contributions (also known as elective deferrals) are typically made on a pre-tax basis and are 100% tax-deductible. This reduces your taxable income in the year of contribution.
• Employer contributions (made by the business or as profit-sharing contributions) are also tax-deductible for the business or the self-employed individual.
• Roth contributions to a solo 401(k) are made with after-tax dollars and are not tax-deductible. but qualified withdrawals in retirement are tax-free.

Yes, there are additional compliance requirements for individual or solo 401(k) plans, particularly when your plan grows beyond a certain size. These include:

• Form 5500 Filing: If your individual 401(k) plan has $250,000 or more in assets at the end of the plan year, you must file Form 5500 with the IRS.
• Contribution Limits: You must ensure contributions do not exceed the annual limits set by the IRS.
• Loan Compliance: If your solo 401(k) plan allows loans, you must follow the IRS regulations for administering and reporting those loans.
• Fiduciary Responsibility: As the plan administrator, you have fiduciary duties to ensure the plan complies with the Employee Retirement Income Security Act (ERISA) regulations and maintains accurate records.

Opening an individual 401(k) with Entrust is quick and easy — it can be done online in just 10 minutes. Click here to get started, or schedule a call with one of our IRA experts. They can give you the information you need to make the right decision for your retirement portfolio.

Contribution limits may vary from year to year. Check out the current HSA contribution limits here. 

Only individuals covered by a high-deductible health plan (HDHP) are eligible to contribute to an HSA. The IRS defines an HDHP as a health insurance plan with a higher deductible than typical health plans, which means you pay more of your healthcare costs upfront before the insurance begins covering expenses.

Navigate to our IRA contribution limits page for the updated minimum deductible and out-of-pocket maximums.

After age 65, you can no longer contribute to your Health Savings Account (HSA) if you are enrolled in Medicare. Once you enroll in any part of Medicare (Part A, B, etc.), you become ineligible to make HSA contributions. This is because Medicare does not qualify as a high-deductible health plan (HDHP), which is a requirement for HSA contributions.

However, if you are still working and have not enrolled in Medicare, you can continue to contribute to your HSA beyond age 65, as long as you remain enrolled in an HDHP.

If you become eligible to contribute to an HSA mid-year, the IRS allows you to contribute the full annual limit for that year, even if you’re not eligible for the entire year. This is known as the Last-Month Rule.

As long as you are eligible on December 1 (meaning you’re enrolled in a high-deductible health plan, or HDHP), you can contribute the full year’s limit to your HSA.

However, under this rule, you must remain eligible (stay enrolled in an HDHP) for the entire following year (called the “testing period”). If you fail to remain eligible for the entire testing period, the contributions made under the Last-Month Rule will be subject to taxes and a 10% penalty.

Yes, you can make changes to the amount you contribute to your HSA during the plan year. Since contributions to an HSA are often made through payroll deductions (for employees), you have the flexibility to adjust these contributions at any time during the year, as long as your employer allows it. You can increase, decrease, or stop your contributions within the IRS annual limits for HSA contributions.

Yes, both your employer and family members can contribute to your Health Savings Account (HSA). Employer contributions are common and can be part of your benefits package, while family members can also contribute to your HSA on your behalf, as long as you are eligible. These contributions count towards the IRS annual contribution limit for HSAs, which includes any combination of contributions from you, your employer, and family members.

Yes, you can make catch-up contributions to your Health Savings Account (HSA) if you are 55 years or older. The IRS allows individuals in this age group to contribute an additional $1,000 per year above the standard annual contribution limit. This catch-up contribution is designed to help older individuals save more for medical expenses as they approach retirement.

Opening a Health Savings Account (HSA) with Entrust is quick and straightforward, and can be done online in just 10 minutes. Click here to start the process, or if you’d like to explore your options first, schedule a call with one of our IRA experts.