On Monday, the IRS released Notice 2020-79 which provides cost of living adjustments for retirement plans for 2021.
401(k), 403(b), most 457 plans, and Thrift Savings Plan contribution limits have remained the same as 2020 at $19,500. The annual catch-up limitation for employees over age also remains unchanged from 2020, at $6,500.
401(k), 403(b), most 457 plans, and Thrift Savings Plan contribution limits have remained the same as 2020 at $19,500. The annual catch-up limitation for employees over age also remains unchanged from 2020, at $6,500.
The annual limitation for SIMPLE retirement accounts also remains unchanged from 2020 at $13,500.
Phase out ranges for contributing to IRAs have increased $1,000:
For single taxpayers covered by a workplace retirement plan the phase-out range is $66,000 to $76,000.
The income phase-out range for Roth IRAs has also gone up:
Maximum contribution limits to traditional and Roth IRAs at $6,000 with catch-up contributions for individuals over age 50 of $1,000.
For more information see the Journal of Accountancy or IRS News Release 2020-244.
Contact your accountant with any questions and follow us on LinkedIn to stay up to date on all of our posts.
Phase out ranges for contributing to IRAs have increased $1,000:
For single taxpayers covered by a workplace retirement plan the phase-out range is $66,000 to $76,000.
- For married couples filing jointly where the IRA contributor is covered by a workplace retirement plan the phase-out range is $105,000 to $125,000.
The income phase-out range for Roth IRAs has also gone up:
- For single taxpayers and head of household the phase-out range is $125,000 to $140,000, up $1,000.
- For married couples filing jointly the phase-out range is $198,000 to $208,000, up $2,000.
Maximum contribution limits to traditional and Roth IRAs at $6,000 with catch-up contributions for individuals over age 50 of $1,000.
For more information see the Journal of Accountancy or IRS News Release 2020-244.
Contact your accountant with any questions and follow us on LinkedIn to stay up to date on all of our posts.