401k, 403b, IRA Contribution and Income Limit Changes from Officially Released by IRS

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[Update] You can now see the most up-to-date 401K/403b, IRA and Roth IRA limits here

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The IRS has released the latest 401k, 403b, IRA and other retirement/thrift plan contribution and income limits. With COLA remaining unchanged again this year, 2011 plan limits have also remained largely unchanged for the third year in a row. Income thresholds have marginally increased over last year.

Here is a summary of the main changes with links to more detailed articles:

401(k), 403(b), or 457(b) Plans

- The elective deferral (contribution) limit for employees who participate in employer sponsored 401k, 403b, or 457b plans, and the federal government’s Thrift Savings Plan remains unchanged at $16,500.

- The catch-up contribution limit under those plans for those aged 50 and over remains unchanged at $5,500, making the total contribution maximum for those in this age group $22,000.

See 2011 vs 2010 401K, 403b Contribution Limits and Rules for more details

IRA Plans

-  The tax deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are active participants in an employer-sponsored retirement plan and have modified adjusted gross incomes (AGI) between $56,000 and $66,000, unchanged from 2010.

- For married couples filing jointly, in which the spouse who makes the IRA contribution is an active participant in an employer-sponsored retirement plan, the income phase-out range for claiming a tax deduction on contributions in 2011  is $90,000 to $110,000, up from $89,000 to $109,000.

- For an IRA contributor who is not an active participant in an employer-sponsored retirement plan and is married to someone who is an active participant, the contribution tax deduction in 2011 is phased out if the couple’s income is between $169,000 and $179,000, up from $167,000 and $177,000.

See this article for more IRA plan rules and contribution limits

Roth IRA

- The AGI phase-out range for taxpayers making contributions to a Roth IRA is $169,000 to 179,000 for married couples filing jointly, up from $167,000 to $177,000 in 2010.

- For singles and heads of household, the income phase-out range is $107,000 to $122,000, up from $105,000 to $120,000.

- For a married individual filing a separate return who is an active participant in an employer-sponsored retirement plan, the phase-out range remains $0 to $10,000.

See this article for more on Roth IRA contribution and conversion rules

Other Limits

- The AGI limit for the saver’s credit for low-and moderate-income workers is $56,500 for married couples filing jointly, up from $55,500 in 2010; $42,375 for heads of household, up from $41,625; and $28,250 for married individuals filing separately and for singles, up from $27,750.

- The limitation regarding SIMPLE retirement accounts remains unchanged at $11,500.

The IRS will soon be releasing their 2011 tax brackets and I will post these details when available. I encourage you to subscribe (free) via Email or RSS to get the latest updates.

Official source : IRS.gov

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{ 2 comments… read them below or add one }

Robert November 5, 2010 at 7:06 pm

what should you in terms of 401(k) if your employer is no longer matching?

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andys2i November 5, 2010 at 7:07 pm

You should keep contributing. Your employer match is a bonus, so treat it like that. If you get it, great; but it should not stop you contributing as much as possible within the IRS prescribed limit.

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