401(K) increase is a great tax planning tool for individuals

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan has increased to $20,500, up from $19,500, offering a great tax planning tool for individuals.

The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the Saver's Credit, all increased for 2022.

Taxpayers are able to deduct contributions to a traditional IRA if they meet certain conditions.

If during the year either the taxpayer or the taxpayer's spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income.

For phase out and other income limitation information, contact us or visit the IRS website here.

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Last updated: 8th July 2022