IRS Releases 2022 Retirement Account Contribution and Contribution Deduction Limits
IRS Releases 2022 Retirement Account Contribution and Contribution Deduction Limits
By: Margaret Nickens
The IRS released the 2022 contribution limits and deduction income limits for IRAs, 401(k)s, and other retirement accounts. While there’s some disappointing news in the batch, there’s definitely some increases to celebrate.
The Bad News
The IRS is not increasing contribution limits for traditional or Roth IRAs. During 2022, individuals can save up to $6,000 in an IRA or Roth IRA. The catch-up contribution for those 50 and older will also remain at $1,000.
The Good News
Contribution limits for 401(k)s, 403(b)s, most 457 plans, and Thrift Savings Plans will increase to $20,500. The catch-up contribution for those 50 or older will remain at $6,500.
Simple IRA contribution limits will increase to $14,000, but the catch-up contribution limit will remain at $3,000.
2022 Deduction Income Limits
More Americans will qualify for tax breaks in 2022 due to increases to the income thresholds for deducting IRA contributions.
IRA savers can deduct their contributions as long as their income is below certain thresholds. After reaching those income limits, IRA savers will see their deduction phased-out before disappearing entirely. The phase-out ranges in 2022 will be:
- $68,000-$78,000 for a single person who is covered by a workplace retirement plan
- $109,000-$129,000 for a married couple filing jointly if the spouse who is contributing is covered by a workplace retirement plan
- $204,000-$214,000 for a married couple if the spouse making the contribution is not covered by a workplace retirement plan but the other spouse is covered
- $0-$10,000 for a married person filing a separate return and who is also covered by a workplace retirement plan
Individuals can only contribute the full amount to a Roth IRA if their income is below a threshold. Their ability to contribute will be phased-out until their income completely disqualifies them from contributing to a Roth IRA. In 2022, the phase-out ranges will be:
- $129,000-$144,000 for single filers
- $204,000-$214,000 for joint filers
- $0-$10,000 for those who are married filing separately
The income limits for the Saver’s Credit will also be increasing to $68,000 for joint filers, $51,000 for head-of-household filers, and $34,000 for single filers and married people filing a separate return.
