Thursday, November 3, 2016

2017 IRA and Pension Plan Limitations Announced

The 2017 IRA and pension plan limitations have been announced.  Below are some of the more
common amounts for 2017.

The defined benefit plan limitation remains at $215,000 ($210,000 for 2016).

The defined contribution plan maximum remains at $54,000 ($53,000 for 2016).

The annual compensation limit for most employer contributions remains at $270,000 ($265,000 for 2016).

The Retirement Savers Credit is completely phased out at:  MFJ = $62,000, HH = 46,500, and all others = $31,000 (up from $61,500, $46,125, and $30,750 respectively for 2016).

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 catchup 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 2017 are:
$62,000-$72,000 (up from $61,000-$71,000); MFJ = $99,000-$119,000 (up from $98,000-$118,000); and MFJ when the taxpayer is not covered but the spouse is = $186,000-$196,000 (up from $184,000-$194,000).

Roth IRA AGI phase-out limits increase to $118,000-$133,000 (up from $117,000-$132,000 applicable for 2016).  For MFJ these amounts are $186,000-$196,000 (up from $184,000-$194,000 applicable for 2016).

The definition of highly compensation for purposes of section 414(q)(1)(B) is $120,000 (same as 2016).

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 Notice 2016-62 can be found at by clicking on irs-drop and then clicking on n-2016-62.

This text has been shared with you courtesy of:  David & Mary Mellem, EAs & Ashwaubenon Tax Professionals, 920-496-1065 (920-496-9111).

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