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IRA and 401(k) contribution limits for 2017

401(k) and IRA contribution limits
November 09, 2016

By Alliant Credit Union

Alliant financial consultants

Two weeks ago, the IRS announced the cost-of-living adjustments made to contribution limits and income thresholds for retirement plans for the 2017 tax year. Cost of living index increases were not high enough to trigger adjustments of most IRS contribution limitations for 2017 vs 2016. However, the income ranges for IRA phase-outs have been increased  

401(k)

  • Contribution limits for employee 401(k) plans remain at $18,000.
  • Catch-up contributions for 401(k) participants aged 50 and older stay at $6,000.

Traditional IRAs (individual retirement account)

  • The annual contribution cap for individual retirement accounts (IRA) is unchanged from 2016 at $5,500 per eligible individual.
  • Catch-up contributions for those 50 and over remain capped at an additional $1,000 ($6,500 total contribution).
  • The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $62,000 and $72,000 (up $1000 from 2016).
  • For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out increases by $1,000 vs 2016, to a range of $98,000 to $119,000. 
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $186,000 and $196,000, up from $184,000 and $194,000.
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

Roth IRAs

  • For married couples filing jointly, the income phase-out range for taxpayers contributing to a Roth IRA is at an AGI of $186,000 to $196,000, up from $184,000 to $194,000 in 2016.
  • For singles and heads of household, the Roth IRA income phase-out range is $118,000 to $133,000, up from $117,000 to $132,000.
  • For a married individual filing a separate return, the Roth IRA phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000

 Summary of 2017 limits vs 2016

      2016 2017
Individual Retirement Accounts (IRAs)                                                       
IRA Contribution Limit $5,500 $5,500
IRA Catch-Up Contributions 1,000 1,000
 
IRA AGI Deduction Phase-out Starting at 
   
Joint Return $98,000 $99,000
Single or Head of Household 61,000 62,000
 
SEP
 

 
 
SEP Minimum Compensation $600 $600
SEP Maximum Contribution 53,000 54,000
SEP Maximum Compensation 265,000 270,000
 
SIMPLE Plans 
   
SIMPLE Maximum Contributions $12,500 $12,500
Catch-up Contributions 3,000 3,000
 
401(k), 403(b), Profit-Sharing Plans, etc.     
 
 
 
 
Annual Compensation $265,000 $270,000
Elective Deferrals 18,000 18,000
Catch-up Contributions 6,000 6,000
Defined Contribution Limits 53,000 54,000
ESOP Limits 1,070,000 1,080,000
 
Other
 
 
 
 
HCE Threshold $120,000 $120,000
Defined Benefit Limits 210,000 215,000
Key Employee 170,000 175,000
457 Elective Deferrals 18,000 18,000
Control Employee (board member or officer) 105,000 105,000
Control Employee (compensation-based) 215,000 215,000
Social Security Taxable Wage Limit 118,500 127,200

 

For more information on these updated contribution limits and income caps, consult your tax advisor.
 

Need help with your retirement plan? Visit our website or call 800-328-1935 to set up a no-cost, no-obligation financial planning session with a financial consultant with Alliant Retirement and Investment Services.


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