IRA Contribution Limits and Catch Up Contributions For those who annually contribute to their IRA account and wish they could contribute more, there is good news. The annual contribution limit is inflation adjusted each year and is slowly increasing. Taxpayers 50 and older are allowed larger contributions through so-called “make-up” provisions (see table below).The contribution limit for Traditional IRA Accounts for taxpayers that do not have a qualified plan with their employer is as follows.IRA Contribution LimitsYear2006-20072008-20112012Under Age 504,0005,000Inflation AdjustedAge 50 & Over5,0006,000Inflation AdjustedHowever, if a taxpayer is an active participant in an employer’s pension plan or a self-employed pension plan, the deductible amount will be ratably phased out if their income for the year (AGI) is within the phase out range and not allowed at all if the AGI exceeds the phase out range (see the table below). The phase-out ranges are adjusted annually for inflation.Phase-Out RangesFiling Status20102011Single & Head of Household56,000 - 66,00056,000 - 66,000Married Filing Jointly89,000 - 109,00090,000 - 110,000Married Filing Separately0 - 10,0000 - 10,000 Special rule for a nonactive participant spouse - The limits for deductible IRA contributions do not apply to the spouse of an active participant. Rather, the maximum deductible IRA contribution for an individual who is not an active participant but whose spouse is an active participant, is phased out for the non-active participant if their combined AGI is between the inflation adjusted limits for the year as illustrated in the table below.Nonactive Spouse Phase-Out RangesYear20102011Phase-Out Range167,000 - 177,000169,000 - 179,000 While the tax or legal information provided is based on our understanding of current laws, and has been gathered from sources believed to be reliable, it cannot be guaranteed. Federal tax laws are complex and subject to change. This information is not intended to be a substitute for specific individualized tax or legal advice and should only be relied upon when coordinated with individual professional advice. Neither FSC Securities Corporation, nor its registered representatives, provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your own tax or legal counsel for advice.