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Example. You are a full-time student with no taxable
compensation and marry during the year. Neither you nor
your spouse is at least age 50 by the end of 2023. Your When Can Contributions Be
spouse has taxable compensation of $30,000. Your
Made?
spouse plans to contribute (and deduct) $6,500 to a tradi-
tional IRA. If you and your spouse file a joint return, you
As soon as you open your traditional IRA, contributions
and your spouse can each contribute $6,500 to a tradi-
can be made to it through your chosen sponsor (trustee or
tional IRA. Because you have no compensation, you can
other administrator). Contributions must be in the form of
add your spouse’s compensation, reduced by the amount
money (cash, check, or money order). Property can’t be
of your spouse’s IRA contribution ($30,000 - $6,500 =
contributed.
$23,500), to your compensation (-0-) to figure your maxi-
mum contribution to a traditional IRA. In your case, $6,500 Although property can’t be contributed, your IRA may
is your contribution limit, because $6,500 is less than invest in certain property. For example, your IRA may pur-
$23,500 (your compensation for purposes of figuring your chase shares of stock. For other restrictions on the use of
contribution limit). funds in your IRA, see Prohibited Transactions, later in this
chapter. You may be able to transfer or roll over certain
Filing Status property from one retirement plan to another. See the dis-
cussion of rollovers and other transfers later in this chapter
Generally, except as discussed earlier under Kay Bailey under Can You Move Retirement Plan Assets.
Hutchison Spousal IRA Limit, your filing status has no ef-
You can make a contribution to your IRA by having
fect on the amount of allowable contributions to your tradi-
TIP your income tax refund (or a portion of your re-
tional IRA. However, if during the year either you or your
fund), if any, paid directly to your traditional IRA,
spouse was covered by a retirement plan at work, your de-
Roth IRA, or SEP IRA. For details, see the instructions for
duction may be reduced or eliminated, depending on your
your income tax return or Form 8888, Allocation of Re-
filing status and income. See How Much Can You Deduct,
fund.
later.
Example. You and your spouse are both age 53. You Contributions can be made to your traditional IRA for
both work and you both have a traditional IRA. You earned each year that you receive compensation. For any year in
$3,800 and your spouse earned $48,000 in 2023. Be- which you don’t work, contributions can’t be made to your
cause of the Kay Bailey Hutchison Spousal IRA limit rule, IRA unless you receive taxable alimony, nontaxable com-
even though you earned less than $7,500, you can con- bat pay, military differential pay, or file a joint return with a
tribute up to $7,500 to your IRA for 2023 if you file a joint spouse who has compensation. See Who Can Open a
return. Your spouse can contribute up to $7,500 to their Traditional IRA, earlier. Even if contributions can’t be made
IRA. If you file separate returns, the amount that can be for the current year, the amounts contributed for years in
contributed to your IRA is limited by your earned income, which you did qualify can remain in your IRA. Contribu-
$3,800. tions can resume for any years that you qualify.
Contributions must be made by due date. Contribu-
Less Than Maximum Contributions tions can be made to your traditional IRA for a year at any
If contributions to your traditional IRA for a year were less time during the year or by the due date for filing your return
than the limit, you can’t contribute more after the due date for that year, not including extensions. For most people,
of your return for that year to make up the difference. this means that contributions for 2023 must be made by
April 15, 2024.
Example. You are age 40 and earn $30,000 in 2023. For tax years beginning after 2019, the rule that
Although you can contribute up to $6,500 for 2023, you TIP you are not able to make contributions to your tra-
contribute only $3,000. After April 15, 2024, you can’t ditional IRA for the year in which you reach age
make up the difference between your actual contributions 70½ and all later years has been repealed.
for 2023 ($3,000) and your 2023 limit ($6,500). You can’t
contribute $3,500 more than the limit for any later year.
Designating year for which contribution is made. If
an amount is contributed to your traditional IRA between
More Than Maximum Contributions January 1 and April 15, you should tell the sponsor which
year (the current year or the previous year) the contribu-
If contributions to your IRA for a year were more than the tion is for. If you don’t tell the sponsor which year it is for,
limit, you can apply the excess contribution in one year to the sponsor can assume, and report to the IRS, that the
a later year if the contributions for that later year are less contribution is for the current year (the year the sponsor
than the maximum allowed for that year. However, a pen- received it).
alty or additional tax may apply. See Excess Contribu-
tions, later, under What Acts Result in Penalties or Addi- Filing before a contribution is made. You can file your
tional Taxes. return claiming a traditional IRA contribution before the
contribution is actually made. Generally, the contribution
10 Chapter 1 Traditional IRAs Publication 590-A (2023)
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