Cost of living adjustments that affect dollar limitations for pension plans as well as other retirement-related items for the 2012 tax year were announced by the IRS.
The recent IRS press release includes the following:
The elective contribution limit increased from $16,500 to $17,000 for employees who participate in 401k, 403b, many 457 plans and the Thrift Savings Plan. However, the “catch-up” contribution for individuals 50 and over is the same at $5,500.
For taxpayers making contributions to a traditional IRA, the deduction is phased out for heads of household and singes who are covered by a workplace retirement plan and also have modified adjusted gross incomes between $58,000 and $68,000. This is up from $56,000 and $66,000 in 2011. In the case of married couples who file jointly, if one spouse makes the IRA contribution that’s covered by a workplace retirement plan, the phase-out range is $92,000 to $112,000, which is up from $90,000 to $110,000. In the case of married couples who file jointly and the IRA contributor is not covered by a workplace plan, but is married to someone who is covered, the phase-out range if $173,000 to $183,000. This is an increase from $169,000 to $179,000.
The adjusted gross incomes phase-out range for married couples filing jointly who make contributions to a Roth IRA is $173,000 to $183,000, which is an increase from $169,000 to $179,000 in 2011. For heads of households and singles, the income phase-out range is $110,000 to $125,000, which is up from $107,000 to $122,000. The phase-out range is still $0 to $10,000 for a married person who is filing a separate return and is covered by a workplace retirement plan.
You can see more details about the adjustments on the IRS website. www.irs.gov.
