Many income limits and other tax numbers are adjusted each year, either for inflation, or by another statutory mandate. These tax numbers include the tax tables and tax brackets for each year, for example. The numbers for the coming year are announced each fall.
This year is a bit confusing because some of the retirement plan tax numbers were increased by cost of living adjustments. However, other numbers remain unchanged from the previous year because the amount of the change was below the amount legally required to change the figures.
IRA Contribution Limits 2013
The 2013 IRA contribution limits were recently published by the IRS. Note that these limits are for contributions made during the 2013 tax year, for use when filing income taxes due by April 2014. If you are looking for the numbers to use when filing taxes due by April 2013, then you need the 2012 IRA contribution limits.
The maximum IRA contribution for 2013 is $5,500. This is an increase of $500 over the contribution limits for previous years. However, the 2013 IRA catch-up contribution amount remains unchanged at $1,000. Only taxpayers over age 50 are permitted to make a catchup contribution to an IRA account.
Therefore, taxpayers under age 50 may contribute up to $5,500 to their IRA during the 2013 tax year and those over age 50 may contribute up to $6,500. Remember, however, that IRA contributions may be made through April 15th of the following year. In other words, contributions made anytime between January 1, 2013 and April 15, 2014 may be claimed on the 2013 income taxes. This is provided, of course that none of the amount contributed between January and April 15th, was deducted on your 2012 taxes.
Maximum Income for Deductible IRA Contributions 2013
Traditional IRA contributions are tax deductible for taxpayers with incomes below certain thresholds. These income limits are also adjusted each year for inflation. For 2013, the maximum adjusted gross income (AGI) for a full IRA contribution deduction is $95,000 for joint filers, and $59,000 for single filers. Taxpayers with high incomes above these amounts will have to calculate the phase-out for their 2013 IRA contributions. Those with incomes higher than $115,000 for married filing jointly, or $69,000 for those filing single, cannot deduct any part of their contribution to a traditional IRA account.
Other IRS tax numbers were published as well. We’ll update you on all the 2013 tax numbers here. Grab the FinanceGourmet Feed to stay on top of all the current personal finance advice as well as all the 2012 tax tips and tricks.