IRS releases 2022 limits on retirement plans

Your Guide to State, Local, Federal, Estate + International Taxation

Like many other figures, the contribution limits and phase out ranges for retirement plans are adjusted annually for inflation. The IRS has recently released new 2022 limits on retirement plans. Here are some highlights of the new changes:

  • Contribution limit for employees who participate in 401(k), 403(b), most 457 plans and the Thrift Savings Plan is increased to $20,500 (a $1,000 increase from 2021).
  • Contribution limit for traditional and Roth IRAs remains the same at $6,000.
  • Contribution limit for SIMPLE retirement account is increased to $14,000.
  • If neither the taxpayer or their spouse is covered by a retirement plan at work, their full contribution to a traditional IRA is deductible. If the taxpayer or their spouse is covered by a retirement plan at work, the deduction is limited according to the following phase out ranges:
Single taxpayers covered by a workplace retirement plan $68,000 – $78,000
Married couples filing jointly when the spouse making the contribution is covered by a workplace retirement plan $109,000 – $129,000
A taxpayer not covered by a workplace retirement plan but married to someone who is covered $204,000 – $214,000
Married filing separate by the taxpayer covered by a workplace retirement plan $0 – $10,000

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There are also new updates to the income phase out ranges for Roth IRA contributions and the Saver’s Credit, as shown below.

Roth IRA
Single taxpayer and heads of household $129,000 – $144,000
Married filing jointly $204,000 – $214,000
Married filing separate $0 – $10,000

 

Saver’s Credit
Single taxpayer and married individual filing separate $20,500 – $34,000
Head of household $30,750 – $51,000
Married filing jointly $41,000 – $68,000

Questions on 2022 limits on retirement plans? Contact your Henry+Horne advisor today!

Haley Braun, CPA