IRS releases 2022 retirement plan and IRA COLA-based limitation amounts
The IRS has released its 2022 cost-of-living-adjusted limitation amounts for tax-qualified retirement plans and IRAs. Read on for a summary of the most important updates.
Tax-qualified retirement plans
- Defined benefit plan annual accrual limit – increased from $230,000 to $245,000.
- Defined contribution plan annual addition limit – increased from $58,000 to $61,000.
- Elective deferrals annual limit – increased from $19,500 to $20,500.
- Annual compensation limit – increased from $290,000 to $305,000.
- Compensation threshold for top-heavy plan “key employee” status – increased from $185,000 to $200,000.
- Compensation threshold for “highly compensated employee” status – increased from $130,000 to $135,000.
- Dollar limit for catch-up contributions for individuals aged 50 or over – unchanged at $6,500.
- Contribution limit for SIMPLE retirement accounts – increased from $13,500 to $14,000.
- Annual Section 457(b) plan limit – increased from $19,500 to $20,500.
- Annual maximum deductible amount for traditional IRA contributions – unchanged at $6,000.
- Dollar amount for determining deductible amount of traditional IRA contributions
- For active participants in an employer retirement plan filing a joint return or as a qualifying widow(er) – increased from $105,000 to $109,000.
- For all others who are active participants in an employer retirement plan (other than married taxpayers filing separate returns) – increased from $66,000 to $68,000.
- Adjusted gross income limit for determining deductible amount of a traditional IRA contribution if not an active participant in an employer retirement plan but spouse is an active participant – increased from $198,000 to $204,000.
- Adjusted gross income phase-out range for determining deductible amount for traditional IRA contributions
- For single individuals and heads of household who are active participants in an employer retirement plan – increased from $66,000-$76,000 to $68,000-$78,000.
- For married couples filing jointly where the spouse who makes the traditional IRA contribution is an active participant in an employer retirement plan – increased from $105,000-$125,000 to $109,000-$129,000.
- For traditional IRA contributions by an individual who is not an active participant in an employer retirement plan but whose spouse is – increased from $198,000-$208,000 to $204,000-$214,000.
- Adjusted gross income limit for determining maximum Roth IRA contributions
- If married and filing jointly or if filing as a qualifying widow(er) – increased from $198,000 to $204,000.
- For all others (other than married taxpayers filing separate returns) – increased from $125,000 to $129,000.
- Adjusted gross income phase-out range for contributions to a Roth IRA
- For married couples filing jointly – increased from $198,000-$208,000 to $204,000-$214,000.
- For singles and heads of household – increased from $125,000-$140,000 to $129,000-$144,000.
Any advice contained in this communication, including attachments and enclosures, is not intended as a thorough, in-depth analysis of specific issues. Nor is it sufficient to avoid tax-related penalties. This has been prepared for information purposes and general guidance only and does not constitute legal or professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice specific to, among other things, your individual facts, circumstances and jurisdiction. No representation or warranty (express or implied) is made as to the accuracy or completeness of the information contained in this publication, and CohnReznick LLP, its partners, employees and agents accept no liability, and disclaim all responsibility, for the consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
CohnReznick Tax: Alerts and Webinars
InsightNew IRC Section 174 can affect all taxpayersTravis Butler, Scott Ibbotson, Tim MorrisonThe new Section 174 law has far-reaching implications for companies conducting qualified research and/or have experimental expenditures. Read more.
InsightRethinking tax accounting methods: 4 key change typesRichard Shevak, Travis Butler, Tim MorrisonOptimizing your company’s tax accounting methods can help you avoid IRS risk or defer tax payments. Read about 4 top change types and their benefits.
InsightBefore you file an estate tax return, here’s what to consider to maximize proceedsDonald NimeyIn some cases where assets’ value declines after the date of death, it may be possible to maximize proceeds with an alternative date. Learn more.
InsightForm 1099 filing for 2022 tax yearJimit Mehta, Susan CooperAs you prepare for the 1099 filing season, note the changes effective for the 2022 tax year as well as important information and deadlines in this alert.
InsightGuidance at last – IRS releases Section 174 accounting method guidanceRevenue Procedure 2023-8 provides procedures to change methods of accounting for specified research or experimental expenditures. Read more.