From Chuck Weber, your Veteran Service Officer...
 
Retirement Plan Contribution Limits 2016 Changes
The IRS has different contribution limits for different types of retirement accounts, and keeping up with them can bechallenging. If you are 50 or older, you are eligible to make additional catch-up contributions, adding to the confusion.Below are the limits on 2015 retirement plan contributions for various plan types. You can make contributions forindividual retirement accounts, or IRAs, all the way up to the tax-filing deadline (for most taxpayers) of April 18,2016. Provided are the 2016 amounts to help in your retirement planning. 

Limit on contributionsPlan type 2015 limits and 2016 limits
-IRA, traditional and RothUnder age 50 $5,500 and $5,500Age 50 and older $6,500 and $6,500-Deferred contribution plans, e.g., 401(k), 403(b) and 457 plansUnder age 50 $18,000 and $18,000Age 50 and older 50 $24,000 and $24,000-SIMPLE plansUnder age 50 $12,500 and $15,500Age 50 and older $12,500 and $15,500-Retirement plan saver's tax credit (subject to income limits) $1,000 and $1,000-Social Security wage base $118,500 and $118,500 

Traditional IRA deduction limits. Deductions for traditional IRAs are phased out based on your income and whetheryou or your spouse -- if you file jointly -- are covered by a workplace retirement plan.· In 2015, the IRA deduction phase out income range for single and head-of-household taxpayers who arecovered by a workplace retirement plan is $61,000 to $71,000.· In 2016, low inflation means the phase out range remains at $61,000 to $71,000 for single and head-of householdfilers.· For married couples filing jointly in 2015 and where the spouse making the traditional IRA contribution iscovered by a workplace retirement plan, the income phase out range is $98,000 to $118,000. For an IRAcontributor who is not covered by a workplace retirement plan and is married to someone who is covered,the 2015 deduction is phased out if the couple's combined income is between $183,000 and $193,000.· For the 2016 tax year, jointly filing married couples where the spouse making the traditional IRA contributionis covered by a workplace retirement plan again will see the IRA deduction phased out if their income isbetween $98,000 and $118,000. In 2016, for an IRA contributor who is not covered by a workplace retirementplan and is married to someone who is covered, the deduction is phased out when the couple's joint incomeis between $184,000 and $194,000. 

Roth IRA contribution earning limits.
· In 2015, the phase out range of income limits for making a Roth IRA contribution is between $183,000 and$193,000 for jointly filing married couples; and $116,000 to $131,000 for single taxpayers.111· If your income falls in those ranges for your filing status, the amount you can contribute to a Roth IRA isreduced. Make more than the top income amount in each range and you cannot put any money into a RothIRA.· For the 2016 tax year, the Roth IRA income contribution ranges are increased a bit. Married couples filingjointly face the phase outs when their income is between $184,000 and $194,000. The earning range for singletaxpayers is $117,000 to $132,000. 

No Roth conversion limits. Individuals who want to convert a traditional IRA to a Roth account no longer face the$100,000 income limit. This law change means that even if you earn too much to contribute to a Roth IRA, you cancontribute to a nondeductible traditional IRA and then roll that IRA money into a Roth. 

Saver's credit income limits.
Some filers may be able to claim the saver's credit, also known as the retirementsavings contributions credit, but only if they don't make too much money. This tax break for low- and moderate incomeworkers can be claimed on 2015 tax returns as long as a single filer's income is no more than $30,500; nomore than $45,750 for a head of household; or no more than $61,000 for married couples filing jointly. For the 2016tax year, the saver's credit is available to single taxpayers with income up to $30,750; head-of-household filers makingup to $46,125; or jointly filing married taxpayers with income up to $61,500. 
 
Source: Bankrate.com | Kay Bell | November 12, 2016

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