To:.......IRA Custodians/Trustees
From:..James M. Carlson, J.D. President
Date:...October 29, 2015

 

Subject: IRS Announces 2016 Limits For IRAs and Pension Plans

The IRS announced the 2016 limits applying to IRAs and pension plans by issuing IRS news release 2015-119.

The Annual IRA contribution limits remain unchanged - $5,500 if the individual is younger than age 50 in 2015 or 2016, and $6,500 if he or she attains age 50 or older in 2015 or 2016

The maximum SEP contribution for 2016 is the same as for 2015: $53,000.

The SIMPLE IRA contribution limits are unchanged for 2016. The maximum elective deferral contribution amount is $12,500 for a person who is younger than age 50 in 2016 and $15,500 if he or she attains age 50 or older in 2016

The 401(k) elective deferral contribution limits also unchanged for 2016. The maximum elective deferral contribution amount is $18,000 for a person who is younger than age 50 in 2016 and $24,000 if he or she attains age 50 or older in 2016.

Only one of the compensation ranges applying to deductible IRA contributions increases for 2016.

• The 2016 compensation range applying to a person whose filing status is married/joint return but not an active participant is $184,000 - $194,000 (up from $183,000 - $193,000).

Two of the compensation ranges applying to Roth IRA contributions will increase for 2016.

• The 2016 compensation range applying to a person whose filing status is single, head of household or qualifying widower is $117,000 - $132,000 (up from $116,000 - $131,000).
• The 2016 compensation range applying to a person whose filing status is married/joint return is $184,000 - $194,000 (up from $183,000 - $193,000).

Some of the compensation ranges applying to a savers tax credit also will increase.

CWF is revising its brochures and IRA Forms to incorporate the 2016 limits.