Yes, you can contribute to both accounts in the same year, but your total contribution across both accounts cannot exceed the annual limit

The IRS treats a Roth IRA and a traditional IRA as a single unit for contribution purposes. If you contribute $3,000 to a traditional IRA in a given year, you can contribute up to $3,500 more to a Roth IRA that same year—but only if the annual limit is $6,500 total. The limit applies to the combined amount you put into both accounts, not to each account separately.

This rule exists because the IRS wants to prevent people from using multiple accounts to exceed the annual contribution cap. Whether you split your money evenly between the two accounts or put most of it in one and a small amount in the other is entirely up to you, as long as the total does not cross the limit.

The annual contribution limit changes periodically. For 2024, the limit is $7,000 if you are under age 50, and $8,000 if you are 50 or older (the extra $1,000 is called a catch-up contribution). For 2025, the limit is $7,000 and $8,000 respectively. Check the IRS website or your bank's retirement page each January to confirm the current year's limit.

Key Takeaways

  • Your combined contributions to a Roth and traditional IRA cannot exceed the annual limit set by the IRS, which is $7,000 for 2024 and 2025 (or $8,000 if you are 50 or older).
  • You decide how to split your contribution between the two accounts—you could put $4,000 in a Roth and $3,000 in a traditional IRA, for example, as long as the total does not exceed the limit.
  • If you contribute to both accounts, you must track your contributions carefully to avoid accidentally exceeding the limit and facing IRS penalties.
  • Income limits for deducting traditional IRA contributions may apply if you or your spouse have a workplace retirement plan, which could affect your strategy for splitting contributions.

Why someone might contribute to both accounts

People contribute to both accounts for different reasons depending on their tax situation and retirement goals. If you expect to be in a lower tax bracket in retirement, a traditional IRA contribution gives you a tax deduction now. If you expect to be in a higher tax bracket later, a Roth IRA contribution lets you lock in today's tax rate and withdraw tax-free later.

Some people use both accounts as a way to hedge their bets. By splitting contributions between the two, you have some money that was taxed going in (Roth) and some that was not (traditional), giving you flexibility in retirement when you decide which account to withdraw from first.

Income limits that affect your choice

Your ability to deduct a traditional IRA contribution depends on whether you or your spouse have access to a workplace retirement plan like a 401(k), and on your income level. If you earn above a certain threshold and have a workplace plan, you cannot deduct the full amount of a traditional IRA contribution—or any of it.

A Roth IRA contribution has its own income limits. If your income exceeds a certain level, you cannot contribute directly to a Roth IRA at all. These limits change each year and vary depending on whether you file as single, married filing jointly, or another status.

This is why some people contribute to both: if your income is too high to deduct a traditional IRA contribution or to contribute to a Roth, you might split your contribution between the two accounts in whatever way your income allows. A tax professional or your bank's retirement specialist can help you figure out what you are allowed to contribute in your situation.

How to track contributions across two accounts

If you open both a Roth and a traditional IRA at the same bank, that bank will usually track your combined contributions for you and warn you if you are approaching the limit. If you open accounts at different banks, you are responsible for keeping track yourself.

The safest approach is to add up all contributions you made to both accounts during the calendar year before you make your final contribution. If you have already contributed $5,000 to a traditional IRA and the annual limit is $7,000, you know you can contribute no more than $2,000 to a Roth IRA that year. Write this down or keep a spreadsheet so you have a record.

If you accidentally contribute more than the annual limit across both accounts, the IRS allows you to withdraw the excess contribution and any earnings on it before your tax return deadline (usually April 15 of the following year). You will owe income tax on the earnings portion, but you can avoid the 6% penalty tax if you act quickly.

What happens if you exceed the limit

Contributing more than the annual limit to your combined Roth and traditional IRAs triggers a 6% excise tax on the excess amount each year it remains in the accounts. This tax is in addition to any income tax you owe on the earnings.

For example, if the annual limit is $7,000 and you contribute $8,000 total across both accounts, you owe a 6% tax on that $1,000 excess. If you do not withdraw it the next year, you owe another 6% tax on the same $1,000. The penalty stacks up year after year until you remove the excess.

The IRS Form 5329 is used to report excess contributions and the 6% penalty tax on your annual tax return. Most people discover they have made an excess contribution when they file their taxes or when their bank flags it during the contribution season.

Spousal IRAs and contribution limits

If you are married and one spouse does not work or has little income, that spouse can still contribute to an IRA using the working spouse's income. This is called a spousal IRA. The non-working spouse can have their own Roth and traditional IRA, with their own separate contribution limit.

This means a married couple can contribute up to twice the annual limit: one limit for the working spouse's accounts and one limit for the non-working spouse's accounts. Each person's combined contributions to their own Roth and traditional IRA still cannot exceed the annual limit, but the couple as a whole can contribute more.

Frequently Asked Questions

Can I contribute to a Roth and traditional IRA if I have a 401(k) at work?

Yes, you can contribute to both a Roth and traditional IRA even if you have a 401(k). However, if your income is above a certain level and you have a 401(k), you may not be able to deduct a traditional IRA contribution. You can still contribute to a Roth IRA if your income is below the Roth income limit. Your bank or a tax professional can tell you what you are allowed to contribute based on your specific income and workplace plan.

What if I contribute to a Roth IRA and then realize I should have contributed to a traditional IRA instead?

You can move money between your Roth and traditional IRA through a process called a recharacterization, but the rules are strict and the deadline is your tax return deadline (usually April 15). You will need to contact your bank and file Form 8606 with your tax return. A tax professional can walk you through whether this makes sense in your situation.

Do employer contributions to a 401(k) count toward my IRA contribution limit?

No. Your employer's contributions to a 401(k) are separate from your IRA contribution limit. Only money you contribute yourself to a Roth or traditional IRA counts toward the annual IRA limit. Your 401(k) has its own separate contribution limit.

Can I contribute to both accounts if I am self-employed?

Yes. Self-employed people can contribute to both a Roth and traditional IRA using the same annual limit as everyone else. If you have a SEP-IRA or Solo 401(k) for your self-employment income, those have their own separate limits and do not reduce your ability to contribute to a Roth or traditional IRA.