The IRS recently released its annual cost-of-living adjustments for certain retirement plan thresholds in 2013. Although inflation has remained on the low side, several key limits have been bumped up, as shown below. However, note that other limits did not change.
The contribution limit for IRAs also increases to $5,500 for 2013 from $5,000 for 2012, but the catch-up contribution limit for those aged 50 or older remains $1,000. Furthermore, the IRS announced increases in the phase-out ranges for traditional and Roth IRAs in 2013.
The phaseout range for taxpayers who can deduct traditional IRA contributions increases to a range between $59,000 and $69,000 of modified adjusted gross income (MAGI) for single filers; between $95,000 and $115,000 of MAGI for joint filers. For an IRA contributor married to an active plan participant, the phaseout range increases to between $178,000 and $188,000 of MAGI.
The phaseout range for taxpayers making contributions to a Roth IRA rises to between $112,000 and $127,000 of MAGI for single filers; between $178,000 and $188,000 for joint filers.
This is not the complete list of cost-of-living adjustments. Contact your tax adviser for more specifics for 2013.
|Retirement plan provisions||Limit for 2012||Limits for 2013|
|Maximum annual dollar benefit for a defined benefit plan||$200,000||$205,000|
|Maximum dollar limit on additions to a defined contribution plan||$50,000||$51,000|
|Maximum amount of compensation taken into account for qualified retirement plans||$250,000||$255,000|
|Dollar limit for definition of “key employee” in top-heavy retirement plan||$165,000||$165,000|
|Dollar limit for definition of highly compensated employee in qualified plan||$115,000||$115,000|
|Dollar limit for elective deferrals to a 401(k) plan||$17,000||$17,500|
|Dollar limit for contributions to a Savings Incentive Match Plan for Employees||$11,500||$12,000|
|Dollar limit for elective deferrals to deferred compensation plans of state and local governments and tax-exempt organizations||$17,000||$17,500|
|Dollar limit for catch-up contributions to qualified plans||$5,500||$5,500|