Under Age 50

• In 2010 and 2011, you may contribute a maximum of $5,000 or 100 percent of your earned income (whichever is less) to your IRA. This limit pertains to deposits into both traditional and Roth IRA accounts, and such contributions are added together for calculation. Only earned income may be contributed to IRA accounts, except in the case of transfers from other existing IRAs or eligible rollovers from other types of retirement plans. Money deposited into an IRA via rollover or transfer remains exempt from maximum deposit calculations.
  
  

Over Age 50

• If you are over age 50, the IRS permits an additional $1,000 contribution into your IRA. This "catch-up" contribution can be made every year afterwards. All other rules, restrictions and limitations on maximum deposit calculations remain the same. Additionally, the same exempt status applies to money deposited by way of transfers or rollovers from other eligible retirement accounts.
  
  

Deducting Contributions

• In most cases, the entire sum of contributions made to traditional IRA accounts results in an income tax deduction. However, if your income exceeds IRS thresholds, the amount of your deduction may be reduced or even eliminated. If you are single and have no retirement plan at work, you can deduct your entire contribution. However, if you have access to a retirement plan at work -- regardless of whether you participate or what that account balance is -- you can only deduct your IRA contributions if your income is below $56,000. If you are married filing jointly and neither you nor your spouse has a retirement plan at work, the entire amount of your contributions can be deducted on income taxes. If you do not have a retirement plan at work, but your spouse does, your IRA contributions can be deducted only if your income is below $167,000.
  
  

Roth IRA Limits

• Not everyone may contribute to a Roth IRA. Unlike a traditional IRA, where anyone with earned income can contribute but only certain people may receive tax deductions, the IRS restricts the ability to open a Roth IRA to individuals whose income is below a certain threshold. If you are single and your income is below $105,000, you may contribute the full amount to a Roth IRA. If your income is above $105,000 but below $120,000, you may contribute a reduced amount. If your income exceeds $120,000, you may not contribute to a Roth IRA at all.
  
  If you are married filing jointly and your income is below $167,000, you may contribute the full amount to a Roth IRA. If your income is over $167,000 but below $177,000, you may contribute a reduced amount. If your income exceeds $177,000, you may not contribute to a Roth IRA at all.