The Internal Revenue Service announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2016 tax year. Highlights of limitations that changed for 2016 include a $1,000 increase to both the phase-out range for IRA contributors who are not covered by a workplace retirement plan and are married to someone who is covered and the range for taxpayers making contributions to a Roth IRA for married couples filing jointly from $183,000-$193,000 to $184,000-$194,000. The phase-out range for singles and heads of household making contributions to a Roth IRA was also increased by $1,000 from $116,00-$131,000 to $117,000-$132,000. On the other hand, the pension plan limitations listed below will not change because the increase in the cost-of-living index did not meet the statutory thresholds that prompt their adjustment.
2016 Pension Plan Limits that Remain Unchanged from 2015
Annual salary deferrals for 401(k) and 403(b) plans
Age 50 catch-up contributions
Maximum total annual contributions
Maximum annual compensation
Traditional and Roth IRA contributions
Traditional and Roth IRA catch-up contributions
SIMPLE 401(k) and IRA contribution limit
Compensation dollar limit used to determine key employees in a top-heavy plan
Compensation threshold for highly compensated employees “HCE”
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