topic Maximum contributions in Retirement tax questions

Maximum contributions

Pcaejddl — Mon, 01 Oct 2018 12:39:48 GMT

Quick question: I want to contribute the max to my 401K this year which for 56 years Is 24,500. I should also be able to through my own account contribute 6500 to a ROTH IRA, correct?

Re: Maximum contributions

DoninGA — Mon, 01 Oct 2018 14:06:06 GMT

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 from $18,000 to $18,500. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $6,000. So the maximum contributions you can make to a 401(k) account if age 50 or older in tax year 2018 is $24,500. See this IRS website for information - https://www.irs.gov/newsroom/irs-announces-2018-pension-plan-limitations-401k-contribution-limit-increases-to-18500-for-2018

You can contribute to a Roth IRA up to a maximum of $6,500 if age 50 or older in tax year 2018. However, you may be limited on the Roth IRA contribution based on your MAGI and filing status. See this IRS website for Roth IRA contribution limitations - https://www.irs.gov/retirement-plans/plan-participant-employee/amount-of-roth-ira-contributions-that-you-can-make-for-2018

Note that Roth IRA contributions are not deductible on a federal tax return.

Re: Maximum contributions - Far exceed the base plus over 50 in many situations - 403 and 457

racerock11 — Sat, 01 Feb 2020 19:54:00 GMT

This answer is only partially correct. What is not considered is the Age Based Contribution benefit IRS allows for in a 403 and/or 457 plan.

Apparently nobody at Turbo Tax got the message last year and forced many of us to print all the forms and snail mail the forms in - when tax deferred contributions exceeded what is written above and allowed based on:

- past contributions

- nearness to retirement

In our case - we take advantage of this and Turbo Tax has yet to fix their software even though they knew about it in Jan of 2019.

Anyone out there know of a tax application that does take into account Age Based Contributions? In my wifes particular case - almost $70,000 of her income was tax deferred. Blessed to be able to do that.