Individuals must have earned income in order to contribute to individual retirement accounts. They must open an IRA account with a custodian such as a bank, credit union, or investment firm. After selecting a custodian, an individual must deposit cash into his or her investment of choice. The largest contribution allowable is the smaller of $5,000 for each of 2009 and 2010, or 100 percent of earned income (income from employment).

For 2009 and 2010, a married couple in which both spouses work may contribute up to $10,000 in total, with $5,000 in each account (or 100 percent of earned income, if it is less). If one spouse is not working or has earned only a minimal income, he or she may set up what is called a spousal IRA. The working spouse may contribute on behalf of this other spouse. As long as the working spouse has earned income of at least $10,000, the two may set up two IRAs with a maximum total contribution of $10,000, with a maximum of $5,000 contributed to each account. It is therefore possible that the working spouse may contribute up to 100% of this total.

Congress added a special catch-up provision that allows a person 50 or older to make an additional $1,000 contribution.

You may make contributions for a particular year up until April 15 of the following year (unless that date falls on a weekend, in which case it will be extended). For example, if you want to contribute to your IRA for 2009, you have all of 2009, plus up until April 15 of 2010. You must mark on the contribution form the year for which the contribution is made.