topic Re: simple ira contributions in Get your taxes done using TurboTax

simple ira contributions

arbarbara — Tue, 20 Apr 2021 01:28:35 GMT

at age 60, why is 15,000 too high a contribution

Re: simple ira contributions

SundayInSalem — Tue, 20 Apr 2021 01:49:55 GMT

The amount an employee contributes from their salary to a SIMPLE IRA cannot exceed $13,500 in 2020 and 2021 ($13,000 in 2019 and $12,500 in 2015 – 2018).

If an employee participates in any other employer plan during the year and has elective salary reductions under those plans, the total amount of the salary reduction contributions that an employee can make to all the plans he or she participates in is limited to $19,500 in 2020 and 2021 ($19,000 in 2019). See more than one plan.

Catch-up contributions. If permitted by the SIMPLE IRA plan, participants who are age 50 or over at the end of the calendar year can also make catch-up contributions. The catch-up contribution limit for SIMPLE IRA plans is $3,000 in 2015 - 2021.

Retirement Topics - SIMPLE IRA Contribution Limits

Re: simple ira contributions

DawnC — Tue, 20 Apr 2021 01:49:09 GMT

The amount an employee contributes from their salary to a SIMPLE IRA cannot exceed $13,500 in 2020 and 2021.

Catch-up contributions. If permitted by the SIMPLE IRA plan, participants who are age 50 or over at the end of the calendar year can also make catch-up contributions. The catch-up contribution limit for SIMPLE IRA plans is $3,000 in 2015 - 2021.

If an employee's total deferrals are more than the limit for that year, the employee should notify the plan and ask that the difference (called an excess deferral) be paid out of any of the plans that permit these distributions.

Retirement Topics - SIMPLE IRA Contribution Limits

Re: simple ira contributions

arbarbara — Tue, 20 Apr 2021 01:58:20 GMT

Thanks @dawn C,

I contacted the plan and they reaffirmed I was UNDER the 19,500 allowable. Even then, I am only $1500 over the $13,500 referenced in line one.

This is the only plan I contribute to.

If Catch up is limited too $3000, that still is $16.500 and I would still be under?

Re: simple ira contributions

DawnC — Mon, 26 Apr 2021 19:59:19 GMT

Do you have any other retirement accounts in 2020? Although plans may set lower deferral limits, the most you can contribute to a plan under tax law rules is the lesser of:

the allowed amount for that plan type for the year, or
100% of your eligible compensation defined by plan terms (includible compensation for 403(b) and 457(b) plans).

If you’re self-employed, generally your compensation is your net earnings from self-employment (see Calculating Your Own Retirement Plan Contribution and Deduction).

Example
You are 52 years old and participate in a 401(k) plan with Company #1 and a SIMPLE IRA plan with an unrelated employer Company #2. You receive $10,000 in compensation in 2020 from Company #1 and another $10,000 from Company #2. You can’t defer more than $10,000 to either plan (for example, $12,000 to the 401(k) plan and $8,000 to the SIMPLE IRA plan) because your deferrals to each employer’s plan can’t exceed 100% of your compensation from that employer.