Can You Have Multiple Pre-tax IRAs?

The Internal Revenue Service (IRS) allows a taxpayer to contribute to multiple pre-tax individual retirement accounts (IRAs) in a single year. The IRS limits the amount a taxpayer and his employer may contribute to the person’s retirement account based on the type of IRA that receives contributions made by the taxpayer, his employer, or both, however. The IRS may also limit the amount a person may deduct as a contribution to a traditional IRA on his federal tax return.


A SEP-IRA is a non-qualified, employer-sponsored retirement plan that consists of the retirement accounts established for each of a company’s employees who are eligible to benefit from the plan. The IRS only allows an employer to contribute to the SEP-IRAs of its employees. While the IRS allows an employer to make contributions to its SEP-IRA plan at the employer’s sole discretion, the IRS mandates that a contribution made to an employee’s account vest immediately, meaning a contribution to an individual’s account becomes the person’s property at the time of deposit. As of publication, an employer may contribute up to 25 percent of an employee’s compensation or $49,000, whichever is less, to the person’s SEP-IRA on an annual basis.


Similar to a SEP-IRA plan, the retirement accounts set up for a company’s employees make up a SIMPLE IRA plan. The IRS allows both an employee and his employer to contribute to the person’s SIMPLE IRA account in a given year. If an employee chooses to defer a portion of his salary into his SIMPLE IRA, the IRS considers him participating in his employer’s plan. As of the time of publication, the IRS allows an employee below age 50 to contribute the lesser of 100 percent of his compensation or $11,500 to his SIMPLE IRA account. An employee 50 or above may defer an additional $2,500 of his salary into his retirement account. The IRS requires an employer to either make matching contributions to the accounts of the employees participating in the SIMPLE IRA plan or nonelective contributions to the accounts of both participating and non-participating employees each year.

Elective Deferral Limits

If a person participates in more than one retirement plan that allows him to defer a portion of his taxable compensation in a given year, the IRS limits the total amount the person can contribute to all of his retirement accounts. As of the time of publication, the IRS allows a person to defer up to a total of $16,500, or $19,000 if age 50 or above, of his earned income into any one or all of his employer-sponsored retirement accounts.

Traditional IRA

The IRS allows a worker to contribute up to $5,000, or $6,000 if age 50 or older, to a traditional IRA in a single year. If a person owns multiple IRAs outside of his workplace, his aggregate contributions to them cannot exceed these limits. The IRS may reduce or eliminate a worker’s ability to deduct the amount of his traditional IRA contributions on his federal tax return if his modified adjusted gross income exceeds certain thresholds or if he or his spouse participates in an employer-sponsored retirement plan.