Changes for retirement contributions beginning in 2012:
- 401k, 403b, & 457 maximum employee contributions increase to $17,000 per year. The catch up contribution for those age 50 and above remains at $5,500 per year.
- IRA contributions remain unchanged at $5,000 plus $1,000 catch up per year for those age 50 and above.
- Adjusted Gross Income (AGI) phase outs increase for those that can deduct IRA contributions and still participate in a qualified retirement plan (QRP). All Fliers (except Married filing Separately) that don't participate in a QRP can deduct IRA contributions from their taxes regardless of AGI. Those participating in a QRP can only deduct IRA contributions if AGI is under $58,000 for Single Filers and $92,000 for Married Filing Joint. Partial deductions are allowed for fliers with AGI between $58,000-68,000(Single) and $92,000-110,000 (MFJ). For an IRA contributor who is not covered by a QRP but his or her spouse is, the deduction is phased out between $173,000-183,000 (MFJ). Remember if you make a deductible IRA contribution, always keep track of your basis by filing a 8606 with your tax return.
- You can make a full Roth IRA contribution if your AGI is under $110,000 (Single) or $173,000 (MFJ). Partial contributions are allowed for fliers with AGI between $110,000-$125,000 (Single) and $173,000-$183,000 (MFJ).