IRA IRA Contribution Rules

Question 1

What is the standard IRA contribution limit for individuals under age 50 in 2024?

Accepted Answer

$6,500

Answer

For 2024, the IRA contribution limit for individuals under age 50 is $7,000.

Question 2

What is the catch-up contribution amount allowed for individuals age 50 or older in 2024?

Accepted Answer

$1,000

Answer

Individuals age 50 or older can contribute an additional $1,000 catch-up contribution to their IRA in 2024.

Question 3

Which of the following types of income qualifies as compensation for IRA contribution purposes?

Accepted Answer

W-2 wages

Answer

W-2 wages (earned income) qualify as compensation for IRA contribution purposes, while passive income sources do not.

Question 4

What is the deadline for making an IRA contribution that counts toward the prior tax year?

Accepted Answer

April 15 of the following year

Answer

IRA contributions for a given tax year can be made up to the tax filing deadline, typically April 15 of the following year.

Question 5

A taxpayer can contribute to an IRA even if they also participate in an employer-sponsored retirement plan.

Accepted Answer

True, but the deductibility may be limited

Answer

A taxpayer covered by a workplace retirement plan can still contribute to a traditional IRA, but their deduction may be phased out based on income.

IRA - Individual Retirement Account Practice Test