The 2021 annual IRA contribution limits were recently released by the IRS and are found in Notice 2020-79.
Here are the IRA contribution limits for 2021:
- Traditional and Roth IRA contributions: $6,000 (unchanged)
- Traditional and Roth IRA catch-up contributions: $1,000
- The ability to do deduct the IRA contribution amount is based on your earned income. The deductibility phase-out for single taxpayers participating in employer plans such as solo 401k plans increased in 2020 to $66,000 to $76,000 (in 2019, it was $65,000 to $75,000)
- If you are married and file a joint Form 1040 tax return and participate in an employer plan such as a solo 401k plan, the IRA deductibility phase-out increased to $105,000 to $125,000 (it was $104,000 to $124,000 in 2019)
- IRA deductibility phase-out for married with spouse an active participant in employer plan such as a solo 401k plan increased to $198,000 to $208,000 (in 2019, it was $196,000 to $206,000)
- Roth IRA income limitation for determining maximum contribution for married joint filers: phase-out range rises to $198,000 to $208,000 (was $196,000 to $206,000)
- Roth IRA income limitation for determining maximum contribution for single filers and heads-of-households: phase-out range rises to $125,000 to $140,000 (was $124,000 to $139,000)
First Make the IRA Contribution to your Self-Directed IRA
Lastly, for those IRA account holders who have IRA LLCs (aka checkbook IRA), don’t forget to first make the annual IRA contributions to your self-directed IRAs before investing them in your IRA LLCs.