Last Updated on February 7, 2020
2019 Self-Directed IRA LLC Maximum Contribution
How Much Can I Contribute to a Self-Directed IRA LLC Maximum Contribution?
For 2019, the Self-Directed IRA Maximum Contribution for a self-directed IRA is $6,000 if you’re under the age of 50. The self-directed maximum contribution is $7,000 if you’re 50 and older. If you’re 50 and over, you can make an additional $1,000 catch-up to contribution. There are some people who ask if there is a self-directed IRA income limit. The answer to that is, no. There are absolutely no income limits to establish a self-directed IRA.
Note that the 2019 IRA Contribution limits have been increased by $500 above the 2018 limits, including the self-directed IRA.
An IRA contribution is the money that an IRA holder (you) places in your IRA. You can contribute money to any type of IRA, including a self-directed IRA. As you may know, contributions create a nest egg until you reach the age of retirement.
The two most common IRAs to invest in are traditional and Roth. But again, you can invest in any IRA.
When you contribute to your self-directed IRA, make it to the IRA administrator/custodian. Contributions cannot go directly to your LLC. However, when it goes to the custodian, the funds then transfer to your IRA LLC.
Providing Less Than the Self-Directed IRA Maximum Contribution
You are entirely in your rights to contribute less than the self-directed IRA maximum contribution. In fact, there’s no requirement to make any yearly contributions to your IRA. But it’s very important to keep in mind that you cannot make up the difference in the following tax year.
Let’s better explain this with an example from Self-Directed IRA in a Nutshell.
“Jim, who is 47, earned $47,000 in year 2014. Although he can contribute up to $5,500 for that year, Jim only made a contribution of $3,7000. After April 15, 2015, Jim cannot make up the difference between his actual contributions for 2014 ($3,700) and his 2014 limit ($5,500). He cannot contribute $1,800 more than the limit for any later year.”
Roth IRA Maximum Contributions
Roth IRA changes for 2019 are similar to a traditional IRA. Again, the total amount that you can contribute is $6,000. If you are older than 50, you can contribute up to $7,000. Income limit restrictions have also been increased.
If you’re a single filer, your income limit starts at $122,000. This is up from $120,000 in 2018. It ends at $137,000, up from $135,000 in 2017. For married filers and qualifying widowers, the income limit starts at $193,000. This is up from $189,000 in 2018. It ends at $203,000, up from $199,000.
Self-Directed IRA When One Spouse Earns Income
Many people wonder if they can still establish a self-directed IRA if one spouse earned income for the year. You certainly can! Simply file a joint return and you and your spouse can each make IRA contributions.
The amount of your combined contributions must not be more than the taxable compensation on your joint return. Also, they can’t exceed the maximum IRA contributions for the year. It doesn’t matter which spouse earns the compensation.
Why Does a Self-Directed IRA Maximum Contribution Exist?
Why can’t I make larger contributions to my IRA?
This is a good question.
The IRS have kept the IRA contributions low to limit the amount of deductions an individual can take on his/her tax return. This is because they want to limit how much you can save for retirement each year. It may sound strange, but the IRA doesn’t want to you leave the funds in your retirement account and build an inheritance.
Can I Contribute to a Self-Directed IRA if I’m Covered by a Work Retirement Plan?
Even if you participate in an employer-sponsored retirement plan, such as a 401(k) or SIMPLE IRA plan, you can still contribute to a self-directed IRA. However, if your employment-sponsored retirement plan sponsors both you or your spouse, and your income exceeds certain levels, you may not be able to deduct the full contribution.
You have Self-Directed IRA questions, we have answers. At IRA Financial Group, our team has years of experience to help you begin your Self-Directed IRA. Call or email us today and we’ll assign you to an IRA specialist for all of your IRA needs.
Did you know?
Income and gains from a Self-Directed IRA LLC owned by multiple IRAs would go based on the amount invested by each IRA.