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IRA 2013 Year – End Reminders

IRAs are a great way to save for retirement. Here are some reminders for 2013.


  • Limits
    Review the 2013 IRA contribution and deduction limits to ensure you’re taking full advantage of the opportunity to save for retirement. You can contribute up to $5,500 or your taxable compensation, if less ($6,500 if you are age 50 or older by the end of 2013) to a traditional or Roth IRA. However, you may not be able to deduct your traditional IRA contributions if you or your spouse is covered by a retirement plan at work and your income is above a certain level. If you file a joint return, you and your spouse can each make IRA contributions even if only one of you has taxable compensation. You have until April 15, 2014, to make an IRA contribution for 2013.
  • Excess contributions
    If you’ve exceeded the 2013 IRA contribution limit, you should withdraw the excess contributions from your account by the due date of your 2013 tax return (including extensions). Otherwise, you must pay a 6% tax each year on the excess amounts remaining in your account.

Tax credit

You may be able to take a retirement savings contribution tax credit (saver’s credit) of up to $1,000 ($2,000 if filing jointly) for your contributions to either a traditional or Roth IRA. The amount of the credit you can get is based on the contributions you make and your credit rate. Your credit rate can be as low as 10% or as high as 50%. Your credit rate depends on your income and your filing status. See Form 8880 to determine your credit rate.

Required minimum distributions

If you’re 70½ or older, you must take a required minimum distribution from your traditional IRA by December 31, 2013 (April 1, 2014, if you turned 70½ in 2013). You can calculate the amount of your RMD by using the RMD worksheets. You must calculate the RMD separately for each of your traditional IRAs, but can withdraw the total amount from any one or more of them. You face a 50% excise tax if you don’t take your RMD on time. If you own only Roth IRAs, you don’t have to worry about RMDs because you aren’t required to take RMDs from Roth IRAs held in your name.

Charitable donations

You can exclude from gross income up to $100,000 of a 2013 qualified charitable distribution, which is:

  1. a distribution paid directly from your IRA (not an ongoing SEP or SIMPLE IRA),
  2. to a qualified charity,
  3. after you’re 70½, and
  4. by December 31, 2013.

You can use a qualified charitable distribution to satisfy the RMD for your IRA for the year. However, you can’t deduct this amount as a charitable contribution on your tax return.

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January 8, 2016


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