IRA Contribution Gift Tax Return Difference Between Filing Jointly Or Separately Substantiation For Your 2023 Charitable Donations IRA Questions Filing 2023 Tax Year Returns Kiddie Tax Rules Medical Expense Tax Deduction Tax Obligations Of Moving To Another State How Are Court Awards & Out-Of-Court Settlements Taxed Nanny Tax Reduce Your 2023 Tax Bill FSA 2024 Inflation-Adjusted Federal Tax Amounts 10% Penalty Tax Restricted Stock 401(K) Plan SECURE 2.0 Scholarships Considered Taxable Income Casualty Loss Tax Deductions Tax Implications HSA Investment Gift Tax Selling your home Employer-Provided Life Insurance ABLE account Student Loan Interest Tax Breaks Catch-Up Contributions Tax Text Or Email From The IRS

401(K) Retirement Plan Contribution Limit Increases for 2018; Most Other Limits are Stagnant

Retirement plan contribution limits are indexed for inflation, but with inflation remaining low, most of the limits remain unchanged for 2018. One piece of good news for taxpayers who are already maxing out their contributions is that the 401(k) limit has gone up by $500. The only other limit that has increased from the 2017 level is for contributions to defined contribution plans, which has gone up by $1,000. Below are the types of limits and their 2018 limit amounts:

  • Elective deferrals to 401(k), 403(b), 457(b)(2) & 457(c)(1) plans – $18,500
  • Contributions to defined contribution plans – $55,000
  • Contributions to Savings Incentive Match Plan for Employees (SIMPLE) – $12,500
  • Contributions to Individual Retirement Accounts (IRA) – $5,500
  • Catch-up contributions to 401(k), 403(b), 457(b)(2), & 457(c)(1) plans – $6,000
  • Catch-up contributions to SIMPLEs – $3,000
  • Catch-up contributions to IRAs – $1,000

If you are not already maxing out your contributions to other plans, you still have an opportunity to save more in 2018. In addition, if you turn age 50 in 2018, you can begin to take advantage of catch-up contributions.

Higher-income taxpayers also should be pleased that some limits on their retirement plan contributions that had been discussed as part of tax reform did not make it into the final legislation.

However, keep in mind there are still additional factors that may affect how much you are allowed to contribute (or how much your employer can contribute on your behalf). For example, income-based limits may reduce or eliminate your ability to make Roth IRA contributions or to make deductible traditional IRA contributions.

If you have questions about how much you can contribute to tax-advantaged retirement plans in 2018, check with us.

Related Articles

Talk with the pros

Our CPAs and advisors are a great resource if you’re ready to learn even more.