Pension Contribution Limits Announced for 2017
The IRS announced on Thursday, October 27, 2016 that the limit on elective deferral for contributions to 401(k) plans, 403(b) plans, most 457 plans, and the federal government’s Thrift Savings Plan remains $18,000 for 2017, and the catch-up contribution limit for those 50 and older remains $6,000 (Notice 2016-62). Amounts for many other retirement savings plans remained the same while some increased slightly.
The ability of taxpayers who are covered by workplace retirement plans to make a deductible individual retirement arrangement (IRA) contribution is phased out for singles and heads of household who have modified adjusted gross incomes (AGIs) between $62,000 and $72,000, a slight increase from last year.
For married couples filing jointly, where the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phaseout range is $99,000 to $119,000 for 2017. These amounts also increased slightly from 2016. When an IRA contributor is not covered by a workplace retirement plan but is married to someone who is, the deduction is phased out if the couple’s income is between $186,000 and $196,000, also an increase from 2016.
For taxpayers making contributions to Roth IRAs, the phaseout range for determining the maximum contribution is $186,000 to $196,000 for married couples filing jointly and $118,000 to $133,000 for singles and heads of household. These limits are increases from 2016.
The AGI limit for the saver’s credit is $62,000 for married couples filing jointly, $46,500 for heads of household, and $31,000 for single taxpayers and for married individuals filing separately, all increases from 2016.
If you have any questions about your 401k or any other financial planning matters, please don’t hesitate to give us a call at (217) 351-2000.