To:.......IRA Custodians/Trustees
From:..James M. Carlson, J.D. President
Date:...October 20, 2017

 

Subject: IRS Announces 2018 Limits For IRAs and Pension Plans

Yesterday the IRS announced the 2018 limits applying to IRAs and pension plans by issuing IRS Notice 2017-64.

The Annual IRA contribution limits remain unchanged - $5,500 if the individual is younger than age 50 in 2018, and $6,500 if he or she attains age 50 or older in 2018.

The maximum SEP contribution for 2018 increases to $55,000 from $54,000.

The SIMPLE IRA contribution limits are unchanged for 2018. The maximum elective deferral contribution amount is $12,500 for a person who is younger than age 50 in 2018 and $15,500 if he or she attains age 50 or older in 2018.

The 401(k) elective deferral contribution limits do change. The maximum elective deferral contribution amount is $18,500 for a person who is younger than age 50 in 2018 and $24,500 if he or she attains age 50 or older in 2018.

The compensation ranges applying to deductible IRA contributions also increase.

• The 2018 compensation range applying to an active participant whose filing status is single, head of household or qualifying widower is $63,000 - $73,000 (up from $62,000 - $72,000).
• The 2018 compensation range applying to a person whose filing status is married/joint return and an active participant is $101,000 - $121,000 (up from $99,000 - $119,000).
• The 2018 compensation range applying to a person whose filing status is married/joint return but not an active participant is $189,000 - $199,000 (up from $186,000 - $196,000).
• The 2018 compensation range applying to an active participant whose filing status is married but filing a separate return is unchanged at $0 - $10,000.

The compensation ranges applying to Roth IRA contributions have increased for 2017.

• The 2018 compensation range applying to a person whose filing status is single, head of household or qualifying widower is $120,000 - $135,000 (up from $118,000 - $133,000).
• The 2018 compensation range applying to a person whose filing status is married/joint return is $189,000 - $199,000 (up from $186,000 - $196,000).
• The 2018 compensation range applying to a person whose filing status is married but filing a separate return is unchanged at $0 - $10,000.

The compensation ranges applying to the savers tax credit also change 2018.

CWF will be revising its brochures, IRA Forms and the IRA Procedures Manual to incorporate the 2018 limits.

Our October newsletter containing all of the 2018 IRA and pension limits will be issued by October 27th.