Last Call for IRA and 401(k) Contributions
Time is running out to contribute to your IRA and 401(k) accounts
With tax day on the horizon, there are a couple of key things to keep in mind about IRA, 401(k) and other retirement-account contributions.
If you contribute to an IRA, you probably know that you can deduct your contributions from your 2022 taxes. But, did you know you can also deduct contributions you make in 2023 up until April 18?
According to the IRS, those who contribute to an employer-sponsored 401(k), 403(b), IRA, or Achieving a Better Life Experience (ABLE) account, may be able to claim the Saver's Credit. Also known as the Retirement Savings Contributions Credit, the amount of the credit is generally based on the amount of contributions, the adjusted gross income and the taxpayer's filing status. The lower the taxpayer's income (or joint income, if applicable), the higher the amount of the tax credit.
For 2022:
- IRA: annual contributions to an IRA are limited to $6,000. Catch‑up contributions for individuals aged 50 and over are limited to $1,000.
- 401(k): employee 401(k) contributions are limited to $20,500. Those age 50 or older can contribute an additional $6,500. Total employer-plus-employee contributions are limited to $61,000.
For 2023:
- IRA: annual contributions to an IRA are limited to $6,500. Catch‑up contributions for individuals aged 50 and over are limited to $1,000.
- 401(k): employee 401(k) contributions are limited to $22,500. Those age 50 or older can contribute an additional $7,500. Total employer-plus-employee contributions are limited to $66,000.
Questions?
Contact your benefits manager with questions
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