Today we will take a look at the 2013 pension plan limitations, which the IRS recently released.
The elective deferral or contribution limit for employees who participate in 401(k) and 403(b) plans will increase from $17,000 to $17,500.
The catch-up contribution limit for employees who are 50 years old and older and who participate in 401(k) and 403(b) plans remains unchanged at $5,500.
The deferral limitation for SIMPLE retirement accounts will increase from $11,500 to $12,000.
The limitation for defined contribution plans under Section 415 will increase in 2013 from $50,000 to $51,000.
The limit on annual contributions to an IRA rises from $5,000 to $5,500.
For 2013, the AGI phase-out range for taxpayers making contributions to a Roth IRA is $178,000 to $188,000 for married couples filing jointly. This is up from the range of $173,000 to $183,000 in 2012. For singles and heads of household, the income phase-out range is $112,000 to $127,000. That’s up from the range of $110,000 to $125,000.
Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.