[Updated for 2022] – See the latest IRA limits and changes in this article.
The IRS has published the latest retirement plan limits following the release of Cost of Living Adjustment (COLA) figures for next year. This was the second consecutive year of increases to contribution limits, as shown in the table below. With the new $17,500 limit, employees enrolled in an employee sponsored retirement plan (401k, 403b, and Thrift Savings Plans) will be able to contribute an extra $500 per year on a pre-tax basis. However, the catch-up contribution limit available to employees over 50, remained unchanged at $5,500.
Traditional IRA contribution limits also rose by $500 to $5,500, with income deduction limits (below which the IRA contributions are tax deductible) rising in line with inflation. Simple IRA plan contribution limits rose by $500 as well. The maximum limit for defined contribution plan deferrals from all sources (employer and employee combined) increases to $51,000 per participant from $50,000 in 2012.
Other related tax increases for 2013 include:
- The gift exemption amount increase to $14,000, up from $13,000 in 2013. This is the amount one person can give to another tax free in a given year.
- The tax exemption for income earned by Foreign domiciled U.S. citizens rose from $95,100 to $97,600. This exemption is the amount of foreign earnings you can exclude from your US taxable income filing.
- The income limits for making eligible contributions to a Roth IRA plan rose to $178,000 to $188,000 for married couples filing jointly, up from $173,000 to $183,000 in 2012. For singles and heads of household, the income phase-out range is $112,000 to $127,000, up from $110,000 to $125,000.
1 thought on “401k, IRA, SEP and Simple IRA Retirement Plan Contribution and Income Limits”
Can you please tell me if I can open a Simple K if I already have a SEP/IRA account?
I am self employed, an S corporation, and I am the only employee.
Am I allowed to contribute 25% of salary into my SEP/IRA, and also contribute the difference (up to the 2012 overall limit of [over age 50] $55,000) into a Single K account?