IRS announces key IRA updates for 2025 including higher income limits

The IRS has announced updates for individual retirement accounts (IRAs) effective in 2025. Contribution limits will stay the same at $7,000 for those under 50 and $8,000 for those 50 and older. However, income limits for deductible contributions will increase. For traditional IRAs, the income thresholds for full and partial deductions will rise. For example, single filers covered by a workplace plan can deduct contributions if their modified adjusted gross income (MAGI) is $79,000 or less, up from $77,000 in 2024. Roth IRA contribution limits will also change. Single filers can contribute fully if their MAGI is $150,000 or less, an increase from $146,000. Married couples filing jointly will see similar increases in their income limits for contributions.