IRS Announces 2017 Retirement Plan Contribution Limits

The U.S. Treasury Department has announced the retirement plan contributions limits for 2017. While some limits remained the same as 2016, there were several inflation adjustments to others.

These tax breaks encourage saving and when utilized they could have significant effects on people’s financial security during retirement compared to conventional savings accounts. Below is a summary of the newly released 2017 contribution limits for the various retirement plans.

401(k) Employee Deferral

Up to $18,000; unchanged from 2016.

401(k) Catch-Up Employee Deferral

Up to $6,000 additional contribution for employees age 50 or older; unchanged from 2016.

SEP IRA & Solo 401(k)

Up to 25% of employee compensation or $54,000; increased from $53,000 in 2016.

SIMPLE 401(k)

Up to $12,500; unchanged from 2016.

SIMPLE 401(k) Catch-up

Up to $3,000; unchanged from 2016.

Defined Benefit Plans

Up to $215,000 or 100% of the participant’s average compensation for his/her highest 3 consecutive calendar years; increased from $210,000 in 2016.

Individual Retirement Accounts

Up to $5,500; unchanged from 2016.

Individual Retirement Accounts Catch-Up

Up to $1,000 additional contribution for individuals age 50 or older; unchanged from 2016.

Deductible IRA Phase-Out (when covered by a workplace retirement plan)

Single & Head of Household Taxpayers: Adjusted gross income (AGI) between $62,000 and $72,000, up from $61,000 and $71,000 in 2016. Married Filing Jointly: AGI between $99,000 and $119,000, up from $98,000 and $118,000.

Roth IRA Phase-Out

Single & Head of Household Taxpayers: Adjusted gross income (AGI) between $118,000 and $133,000, up from $117,000 and $132,000 in 2016. Married Filing Jointly: AGI between $186,000 and $196,000, up from $184,000 and $194,000.

Retirement Savings Contribution Credit/Saver’s Credit

Single & Married Filing Separate Taxpayers: Adjusted gross income (AGI) up to $31,000, up from $30,750 in 2016. Married Filing Jointly: AGI up to $62,000, up from $61,500 in 2016. Head of Household Taxpayers: AGI up to $46,500, up from $46,125 in 2016.

It is never too early to start tax planning for the current or future tax years. Navigating through all the laws, limitations, and other complexities with retirement plans can be difficult and intimidating. However we have a team of tax consultants with expertise in a variety of areas, who can help tailor a personalized tax plan to maximize savings, minimize risk, and work with your individual financial goals. For tax and retirement planning, please contact us at 520-624-8229.

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