"Effective January 1, 2021, the limitation on the annual benefit under a defined benefit plan under § 415(b)(1)(A) remains unchanged at $230,000....
"The limitation for defined contribution plans under § 415(c)(1)(A) is increased for 2021 from $57,000 to $58,000....
"The limitation under § 402(g)(1) on the exclusion for elective deferrals described in § 402(g)(3) remains unchanged at $19,500.
"The annual compensation limit under §§ 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $285,000 to $290,000.
"The dollar limitation under § 416(i)(1)(A)(i) concerning the definition of 'key employee' in a top-heavy plan remains unchanged at $185,000....
"The compensation amount under § 408(k)(2)(C) regarding simplified employee pensions (SEPs) is increased from $600 to $650....
"The adjusted gross income
limitation under § 25B(b)(1)(A) for determining the retirement savings contributions credit for married taxpayers filing a joint return is increased from $39,000 to $39,500; the limitation under § 25B(b)(1)(B) is increased from $42,500 to $43,000; and the limitation under §§ 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $65,000 to $66,000....
"The deductible amount under § 219(b)(5)(A) for an individual making qualified retirement contributions
remains unchanged at $6,000."
Internal Revenue Service [IRS]
"Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or his or her spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor his or her spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2021:
- For single taxpayers covered by a workplace retirement plan, the phase-out range is $66,000 to $76,000, up from $65,000 to $75,000.
- For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $105,000 to $125,000, up from $104,000 to $124,000.
- For an IRA contributor who is not covered by a
workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple's income is between $198,000 and $208,000, up from $196,000 and $206,000.
- For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
"The income phase-out range for taxpayers making contributions to a Roth IRA is $125,000 to $140,000 for singles and heads of household, up from $124,000 to $139,000. For married couples filing jointly, the income phase-out range is $198,000 to $208,000, up from $196,000 to $206,000."
Internal Revenue Service [IRS]
1298 Minnesota Avenue, Suite H
Winter Park, Florida 32789
Lois Baker, J.D., President firstname.lastname@example.org
David Rhett Baker, J.D., Editor and Publisher email@example.com
Holly Horton, Business Manager firstname.lastname@example.org
Article submission: Online form, or email to email@example.com
BenefitsLink Retirement Plans Newsletter, ISSN no. 1536-9587. Copyright 2020 BenefitsLink.com, Inc. All materials contained in this newsletter are protected by United States copyright law and may not be reproduced, distributed, transmitted, displayed, published or broadcast without the prior written permission of BenefitsLink.com, Inc., or in the case of third party materials, the owner of those materials. You may not alter or remove any trademark, copyright or other notices from copies of the content.
Links to web sites other than BenefitsLink.com and EmployeeBenefitsJobs.com are offered as a service to our readers; we were not involved in their production and are not responsible for their content.
Change Email Address |