Traditional IRA contribution limits are not only limited to a specific dollar amount, but the IRS also limits the deductibility of contributions if the participant and/or spouse have access to a 401(k) plan at work. If you (or your spouse if you are married) do not have a 401(k) plan at work, you can deduct your full contribution, up to the allowable cap that applies to all other contributors too.
- For single taxpayers covered by a workplace retirement plan, the phase-out range is $62,000 to $72,000.
- For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $99,000 to $119,000.
- For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $186,000 and $196,000.
- For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
The income phase-out range for taxpayers making contributions to a Roth IRA is $118,000 to $133,000 for singles and heads of household, up from $117,000 to $132,000. For married couples filing jointly, the income phase-out range is $186,000 to $196,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
Additional Limits
- 401(k), 403(b), most 457 plans, and federal government’s Thrift Savings Plan contribution limits remain at $18,000.
- 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 $6,000.
- The limit on annual contributions to an IRA remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
- The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts remains unchanged at $12,500.
- The limitation used in the definition of highly compensated employee (HCE) remains unchanged at $120,000.
- Contributions an employer can make to an employee’s SEP-IRA cannot exceed the lesser of 25% of the employee’s compensation, or $54,000 ($53,000 for 2016).