IRA Traditional IRA Tax Rules and Deductibility

Question 1

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

Accepted Answer

$7,000

Answer

The IRS raised the annual IRA contribution limit to $7,000 for 2024 for individuals under age 50.

Question 2

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

Accepted Answer

$1,000

Answer

Individuals aged 50 and older may contribute an additional $1,000 catch-up contribution, bringing their 2024 total limit to $8,000.

Question 3

As of 2020, what is the maximum age at which you can make traditional IRA contributions?

Accepted Answer

There is no age limit

Answer

The SECURE Act of 2019 eliminated the prior age 70½ cutoff for traditional IRA contributions, effective January 1, 2020.

Question 4

What is the tax treatment of investment earnings inside a traditional IRA?

Accepted Answer

Tax-deferred growth

Answer

Earnings inside a traditional IRA grow tax-deferred, meaning taxes are not owed until funds are withdrawn.

Question 5

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

Accepted Answer

The tax filing deadline (April 15) of the following year

Answer

IRA contributions for a given tax year may be made up to the tax filing deadline of April 15 of the following year, without extensions.

IRA - Individual Retirement Account Practice Test