Question

2020 traditional IRA contribution limit for 2019

Forum|Forum|6 years ago
April 5, 2020
1 reply
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My husband transferred $500 today for his 2019 traditional IRA contribution. He already had contributed $400 during 2019. The form is telling us that he exceed the $400 limit for 2020 contributions to 2019. If the contribution limit to an IRA is $7000 why is it flagging us for $500?? He is not covered by an employer retirement fund.

macuser_22

Employee

Is there that much taxable compensation?

The maximum IRA contributions for 2019 is $6,000, or $7,000 if you’re age 50 or older by the end of the year; or your taxable compensation for the year which ever is less.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**