IMRF and Individual Retirement Accounts

for Active IMRF Members
Couple Discussing Retirement

An Individual Retirement Account (IRA) is an account that gives you tax advantages for your retirement savings.

2017 Contribution Limits

For tax year 2017, IRA contributions are limited to a total of $5,500 ($6,500 if over age 50). If you have more than one IRA, your total contributions to any combination of IRAs cannot exceed this limit.

To make a $5,500 contribution you must have at least $5,500 of taxable compensation.

Traditional IRAs

One of the tax advantages of a traditional IRA is that you can deduct the amount you contribute from your taxable income. However, there are limitations on what you can deduct if you are covered by a pension plan. The IRS considers you to be covered by a pension plan as of the first date you began participating in IMRF, even if you are not vested.

2017 Traditional IRA Contribution Rules

For single members
If your adjusted gross income is... You can deduct...
Under $62,000
Your entire IRA contribution
Over $62,000 but under $72,000
The amount you can deduct is based on a formula. As your adjusted gross income increases, the amount you can deduct decreases. (Refer to IRS publication 590-A)
Over $72,000
Nothing; your entire contribution is non-deductible
For married members who file jointly
If your adjusted gross income is...
You can deduct...
Under $99,000
Your entire IRA contribution
Over $99,000 but under $119,000
The amount you can deduct is based on a formula. As your adjusted gross income increases, the amount you can deduct decreases. (Refer to IRS publication 590-A)
Over $119,000
Nothing; your entire contribution is non-deductible
For married members who file separately
If your adjusted gross income is...
You can deduct...
Between $0 and $10,000
The amount you can deduct is based on a formula. As your adjusted gross income increases, the amount you can deduct decreases. (Refer to IRS publication 590-A)
Over $10,000
Nothing; your entire contribution is non-deductible

If You Make Non-deductible Contributions

If you make non-deductible contributions to a traditional IRA, you need to complete IRS Form 8606. 

This form details the deductible and non-deductible money in your IRA so you will not pay tax a second time on the portion of your withdrawal that include your non-deductible contributions. However, each withdrawal you make will include at least a proportionate amount of earnings on those contributions that will be taxable.

Roth IRAs

Contributions you make to a Roth IRA are not deductible from your taxable income. In addition:

2017 Roth IRA Contribution Rules

For single members
If your adjusted gross income is... You can contribute...
Below $118,000

Up to $5,500 ($6,500 if over age 50)

At least $118,000 but under $133,000

Your contribution is reduced (Refer to IRS publication 590-A)

$133,000 or more

You cannot contribute to a Roth IRA
For married members who file jointly
If your adjusted gross income is...

You can contribute...

Below $186,000

Up to $5,500 ($6,500 if over age 50)

At least $186,00 but under $196,000

Your contribution is reduced (Refer to IRS publication 590-A)

$196,000 or more

You cannot contribute to a Roth IRA

For married members who file separately
If your adjusted gross income is...

You can contribute...

 $0 Up to $5,500 ($6,500 if over age 50)

Between $0 and $9,999

Your contribution is reduced (Refer to IRS publication 590-A)

$10,000 or more

You cannot contribute to a Roth IRA

Additional Information

For additional information you can download publications from www.irs.gov, request IRS publications at 1-800-TAX-FORM (1-800-829-3676), or consult a tax advisor. An IRS publication that may be helpful is IRS Publication 590-A, "Contributions to Individual Retirement Arrangements (IRAs)"