Wednesday, December 9, 2015

2016 IRA and Pension Plan Limitations Announced

The 2016 IRA and pension plan limitations have been announced.  Many amounts did not change.

Below are some of the more common amounts for 2016.

The defined benefit plan limitation remains at $210,000 (same amount applicable for 2015).

The defined contribution plan maximum remains at $53,000.

The annual compensation limit for most employer contributions remains at $265,000.

The beginning of the phaseout for the Retirement Savers Credit are:  MFJ = $61,500, HH = 46,125, and all others = $30,750 (up from $61,000, $45,750, and $30,500 respectively).

A year of service for SEP coverage remains at $600.

The maximum elective deferral for §401(k), §403(b), §457, and SARSEPs remains at $18,000.  The catch up contribution limit for those aged 50 or older as of the end of the year remains at $6,000.

The maximum elective deferral to SIMPLE plans remains at $12,500.  The catch-up maximum remains at $3,000.

The maximum contribution to IRAs remains at $5,500.  The catch-up for IRAs is not subject to annual indexing and remains at $1,000.  The modified AGI phase-out ranges for 2016 are:
$61,000-$71,000 (up from $60,000-$70,000); MFJ = $98,000-$118,000 (up from $96,000-$116,000); and MFJ when the taxpayer is not covered but the spouse is = $184,000-$194,000 (up from $183,000-$193,000)

Roth IRA AGI phase-out limits increase to $117,000-$132,000 (up from $116,000-$131,000 applicable for 2015).  For MFJ these amounts are $184,000-$194,000 (up from $183,000-$193,000 applicable for 2015).

The IRS News Release also has the other pension related indexed amounts such as key employee, top heavy, and “control employee” limits.

A copy of News Release 2015-118 can be found at by clicking on irs-news and then clicking on IR-15-118.

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