The maximum amount you can contribute to a SIMPLE IRA depends on your age. These are the correct SIMPLE IRA contribution limits for 2009 and 2010. Contributions to other qualified retirement plans (401(k), 403(b), SIMPLE, or SEP) will count toward this limit. You cannot contribute more than 100% of your income.
- Under age 49 at the end of the year: $11,500
- Age 50 or older by the end of the year: $14,000
Deadline for Contributions
Elective contributions are generally made from your paycheck, so you need to have your contributions set up within the year. You can choose to contribute everything at the beginning of the year if your plan allows it, or you can just contribute a certain amount or percentage from each paycheck.
Tax Deduction for Contributions
SIMPLE IRA contributions reduce your taxable income, so you don’t need to take a tax deduction on your return. However, you may be eligible for the Retirement Savings Contribution Credit.