Each year, the IRS publishes an announcement with the cost-of-living adjustments (COLAs) for retirement plans and IRAs that will apply in the coming year.
For IRAs, the COLAs affect the annual contribution limit and the income limits that determine whether taxpayers are eligible to take a deduction for their traditional IRA contributions or to make a Roth IRA contribution. Based on the recently released COLAs, you may be able to contribute more to your self-directed IRA for 2019.
All of your traditional and Roth IRAs are combined when calculating the maximum annual contribution limit.
*May be limited further if your income exceeds the Roth eligibility limits
If you have earned income and are younger than 70½, you are eligible to contribute to a traditional IRA. If you participate in a retirement plan at work, however, you may not be able to take a tax deduction for your contribution, depending on your income. If you (and your spouse if applicable) have income within the range noted in the chart below, based on your tax-filing status, you may take a partial deduction for your contribution. If your income exceeds the top amount in the range, you may not take a deduction.
If you have earned income within or below the income ranges noted in the chart below, you may contribute to a Roth IRA for the year. If your income exceeds the maximum limit for your tax-filing status, you may not contribute to a Roth IRA for the year. Unlike a traditional IRA, there is no 70½ age limit for contribution eligibility and Roth IRA contributions are never tax-deductible.
The COLAs also affect contributions to employer-based IRA plans and owner-only 401(k) plans, sometimes referred to as Individual(k) plans or Solo 401(k) plans.