Catch up IRA: It's never too late

A catch up IRA is allowed under the guidelines set forth by the American Government for its citizens over the age of 50. This catch up program allows the citizen to contribute more than $5000 a year towards their retirement with an additional $1000 for traditional IRA and Roth IRA.

The amount of allowable contribution set by the government has been constantly increased since its inception. The amount for future of limits has yet to be set but the current trend would lead one to believe that the limit will be increased almost every year.

There are additional requirements other than age to make a person to be qualified for this increased amount of investment. For a traditional 401k and Roth IRA a single individual, their income has to be less than $105,000 and if married the income has to be less than $166,000 for the year 2009.

The maximum contribution allowed under the simplified employee pension IRA limits for 2009 are capped at 25% of that person's salary. The simple IRA has a standard limit of $11500 with a catch up limit of $14000 for the year 2009.

For employees sponsored 401K and Solo K has standard contribution limits of $16500 with a catch up limit of $22000.

As is evident, the amount a person can contribute is dependent on which type of retirement fund they are enrolled in. Each type has its benefits and requirements. What plan is appropriate and investment amount is the decision of each individual.

For additional information the IRS has produced publication 590, Individual Retirement Arrangements that can help guide investors further.

The catch up IRA is available no matter what program you are in; just check all the requirements to make sure you qualify.

It is important to obtain qualified council when dealing with income tax rules and related matters. Research on the Internet is a sensible method for keeping your hourly lawyer bills low, but always check your findings with a licensed attorney or accounting professional before making any financial or business decisions. If you need more information about IRS audits or other tax topics, visit us today at http://www.irs-help-tax.com.