The Internal Revenue Service has released new limits for the coming year. Individual Retirement Accounts (IRAs)
IRA contribution limits remain unchanged in 2025 at $7,000. Catch-up contributions for those over age 50 also remain at $1,000, for a total limit of $8,000. Roth IRAs
The income phase-out range for Roth IRA contributions increases to $150,000-$165,000 for single filers and heads of household, a $4,000 increase. For married couples filing jointly, the phase-out will be $236,000 to $246,000, a $6,000 increase. Married individuals filing separately see their phase-out range remain at $0-10,000. Workplace Retirement Accounts
Those with 401(k), 403(b), 457 plans, and similar accounts will see a $500 increase for 2025, the limit rising to $23,500. Those aged 50 and older will still be able to contribute an extra $7,500, bringing their total limit to $31,000. Under a change made in SECURE 2.0, a higher catch-up contribution limit applies to start in 2025 for employees aged 60, 61, 62, and 63, where they can contribute an extra $11,250, bringing their total limit to $34,750. SIMPLE Accounts
A $500 increase in limits for 2025 gives individuals contributing to this incentive match plan a $16,500 stoplight. According to a change made in SECURE 2.0, individuals can contribute a higher amount to certain applicable SIMPLE retirement accounts. For 2025, this higher amount remains $17,600. The catch-up contribution limit that generally applies for employees aged 50 and over who participate in most SIMPLE plans remains $3,500 for 2025, bringing their total limit to $20,000. Under a change made in SECURE 2.0, a different catch-up limit applies for employees aged 50 and over who participate in certain applicable SIMPLE plans. For 2025, this limit remains $3,850. Under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60, 61, 62, and 63 who participate in SIMPLE plans. For 2025, this higher catch-up contribution limit is $5,250, bringing their total limit to $21,750.
Keep in mind that we provide updates for informational purposes only, so consult with your tax professional before making any changes to your tax strategy. You can also contact our offices, and we can provide you with information about the pending changes. |
