Paul Bonner has published an article on the Journal of Accountancy, titled “IRS makes retirement account inflation adjustments for 2022.” The article begins as follows:
This IRS issued Notice 2021-61 Thursday updating for 2022 dollar-amount ceilings and thresholds for a wide range of qualified retirement plans and accounts, including traditional individual retirement arrangements (IRAs) and Roth IRAs. The notice also has the 2022 limits on elective deferrals for plans under Sec. 401(k) and Sec. 403(b) and most plans under Sec. 457.
The limitation on deferrals for 401(k), 403(b), and most 457 plans is increased to $20,500 for 2022, up from $19,500 in 2021. The limitation on the annual benefit under a defined benefit plan under Sec. 415(b)(1)(A) is increased from $230,000 to $245,000. The limitation for defined contribution plans under Sec. 415(c)(1)(A) is increased from $58,000 to $61,000.
Here are some of the other new or unchanged amounts for 2022:
The deductible amount under Sec. 219(b)(5)(A) for an individual making qualified retirement contributions, including to IRAs and Roth IRAs, remains unchanged at $6,000.
The annual compensation limit under Secs. 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $290,000 to $305,000.
The limitation under Sec. 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $13,500 to $14,000, while the Sec. 408(k)(2)(C) compensation amount regarding simplified employee pensions (SEPs) remains unchanged at $650.
The adjusted gross income (AGI) limit for the saver’s credit is $68,000 for married couples filing jointly, $51,000 for heads of household, and $34,000 for single taxpayers and for married individuals filing separately, all increases from 2021.
Click here to see full article: “IRS makes retirement account inflation adjustments for 2022.”
Posted by Bennett Mansour, Associate Editor, Wealth Strategies Journal