Tax Tip 2021-170:IRS announces changes to retirement plans for 2022

IRS Tax Tips November 17, 2021
Useful Links: IRS.gov Help For Hurricane Victims News Essentials What's Hot News Releases IRS - The Basics IRS Guidance Media Contacts Facts & Figures Around The Nation e-News Subscriptions The Newsroom Topics Multimedia Center Noticias en Español Radio PSAs Tax Scams/Consumer Alerts The Tax Gap Fact Sheets IRS Tax Tips Armed Forces Latest News IRS Resources Compliance & Enforcement News Contact Your Local IRS Office Filing Your Taxes Forms & Instructions Frequently Asked Questions Taxpayer Advocate Service Where to File IRS Social Media	Issue Number: Tax Tip 2021-170 IRS announces changes to retirement plans for 2022 Next year taxpayers can put an extra $1,000 into their 401(k) plans. The IRS recently announced that the 2022 contribution limit for 401(k) plans will increase to $20,500. The agency also announced cost‑of‑living adjustments that may affect pension plan and other retirement-related savings next year. Highlights of changes for 2022 The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased to $20,500. Limits on contributions to traditional and Roth IRAs remains unchanged at $6,000. Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If neither the taxpayer nor their spouse is covered by a retirement plan at work, their full contribution to a traditional IRA is deductible. If the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced or phased out until it is eliminated. The amount of the deduction depends on the taxpayer's filing status and their income. Traditional IRA income phase-out ranges for 2022 are: $68,000 to $78,000 - Single taxpayers covered by a workplace retirement plan $109,000 to $129,000 - Married couples filing jointly. This applies when the spouse making the IRA contribution is covered by a workplace retirement plan. $204,000 to $214,000 - A taxpayer not covered by a workplace retirement plan married to someone who's covered. $0 to $10,000 – Married filing a separate return. This applies to taxpayers covered by a workplace retirement plan Roth IRA contributions income phase-out ranges for 2022 are: $129,000 to $144,000 - Single taxpayers and heads of household $204,000 to $214,000 - Married, filing jointly $0 to $10,000 - Married, filing separately Saver's Credit income phase-out ranges for 2022 are: $41,000 to $68,000 – Married, filing jointly. $30,750 to $51,000 – Head of household. $20,500 to $34,000 – Singles and married individuals filing separately. The amount individuals can contribute to SIMPLE retirement accounts also increases to $14,000 in 2022. More information: Notice 2021-61 Roth IRAs Traditional IRAs Traditional and Roth IRAs — A comparison chart Publication 590-A, Contributions to Individual Retirement Arrangements COLA Increases for Dollar Limitations on Benefits and Contributions   Share this tip on social media -- #IRSTaxTip: IRS announces changes to retirement plans for 2022. https://go.usa.gov/xe88B.  Back to Top         Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov. This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message.

 

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