The IRS has announced the 2016 contribution limits for retirement and health savings accounts. Due to no inflation, and for the third time since 1975, the IRS left cost-of-living adjustment (COLA) unchanged, meaning that key contribution limits for retirement plans will remain unchanged.
Key Unchanged Limits
- 401(k), 403(b), and 457(b) contribution limits will remain the same, $18,000 with the catch-up contribution also remain unchanged at $6,000.
- Small business plans, like SEP and SIMPLE will also have their limits unchanged, $53,000 and $12,500 accordingly.
Highlights of some changes that you should be aware.
- For an IRA contributor who is not covered by a workplace retirement plan, is married to someone who is covered, and is filing jointly, the tax-deductible contribution is phased out if the couple’s modified adjusted gross income (MAGI) is between $184,000 and $194,000 (up from $183,000 and $193,000)
- Singles and heads of household with a MAGI between $117,000-$132,000 can make a full contribution to a Roth IRA (up from $116,000 – $131,000)
- Married filing jointly with a MAGI between $184,000 and $194,000 can also make a full contribution to a Roth IRA (up from $183,000 – $193,000)
- Finally, there were some changes to HSAs limits. Maximum family contribution limit was increased by $100, to $6,750. In addition, high-deductible health plan (HDHP) maximum out-of-pocket amount was increased to $13,100 (up from $12,900)
Download a PDF file to see other limits.