On November 6, 2019, the IRS announced the 401(k) and IRA contribution limits for 2020. The IRA limit remains at $6,000 in 2020. Individuals over age 50 may make a catch-up contribution of $1,000, for a total transfer of $7,000 in 2020.
Traditional IRA contributions from pre-tax income are tax deductible. The traditional IRA has two main tax benefits – contributions are tax deductible and grow tax free. If you are covered by a qualified retirement plan at your workplace, the IRA deduction may be reduced or phased out.
Single Taxpayers with Workplace Plan – IRA contributions for single taxpayers are phased out for individuals with incomes from $65,000 to $75,000.
Married Couple with Workplace Plan – Married taxpayers with joint income of $104,000 - $124,000 will experience the IRA phaseout.
Married and No Workplace Plan – If one spouse has no workplace plan and the other spouse is covered by his or her workplace plan, the phaseout on a joint return is...More