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401k Contribution Limits for 2013

On October 18, 2012, the IRS announced the cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for Tax Year 2013.  In general, many of the pension plan limitations will change for 2013 due to the in the cost-of-living index.  However, other pension plan limitations will remain unchanged. Details include:

The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,000 to $17,500.


The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $5,500.


The income-phase out range for deduction for taxpayers making contributions to a traditional IRA is:

o   The income-phase out range for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) are between $59,000 and $69,000, up from $58,000 and $68,000 in 2012. 

o   $95,000 to $115,000, for married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, up from $92,000 to $112,000 in 2012. 

o   $178,000 and $188,000, for married couples filing jointly with an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, up from $173,000 and $183,000 in 2012.

 

The AGI phase-out range for taxpayers making contributions to a Roth IRA is:

o   $178,000 to $188,000 for married couples filing jointly, up from $173,000 to $183,000 in 2012. 

o   $112,000 to $127,000 for singles and heads of household, up from $110,000 to $125,000 in 2012.

o   $0 to $10,000 for a married individual filing a separate return who is covered by a retirement plan at work, which did not increase from 2012.


The AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is:

o   $59,000 for married couples filing jointly, up from $57,500 in 2012

o   $44,250 for heads of household, up from $43,125 in 2012

o   $29,500 for married individuals filing separately and for singles, up from $28,750 in 2012.

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