The tax man is giving retirement planners a break -- but just a little one. The Internal Revenue Service is letting workers put a bit more into their 401(k) and other retirement plans next year, the IRS announced Thursday, Nov. 1.
Contribution limits have been upped to $19,000 from $18,500 for those in 401(k), 403(b), most 457 plans, and the government's Thrift Savings Plan, said the IRS.
Yearly IRA limits -- which last increased in 2013 -- will also get bumped up by $500 to $6,000. The so-called "catch-up contribution" for people 50 and older has not budged, however, and still remains at a $1,000 limit.
The IRS also noted some changes to deductions including:
For singles: Taxpayers filing as single and covered by their employers' retirement plan have a phase-out range of $1,000 more at $64,000 to $74,000.
For couples: For those filing jointly as married couples with one partner contributing to an IRA who is also covered by an employer retirement plan, the phase-out range is now $103,000 to $123,000 -- up $2,000. If the person paying into the IRA is not covered by a their company's retirement plan but is married to a spouse who is, the deduction is phased out if the couple's income is between $193,000 and $203,000 -- up by $4,000.
For married but separate: A married person who is filing a separate return and who is covered by a job's retirement plan, the phase-out range remains capped at $10,000.
In addition, the income phase-out range for those paying into a Roth IRA is $122,000 to $137,000 for singles and heads of households, up $2,000. For married couples filing jointly, the range is $193,000 to $203,000, up $4,000.
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