Federal Tax Day – year 2016 Inflation Adjustments for Pension Plans, Retirement Accounts Released.
The 2016 cost-of-living adjustments (COLAs) that affect pension plan dollar limitations and other retirement-related provisions have been released by the IRS. In general, many of the pension plan limitations will change for 2016 because the increase in the cost-of-living index due to inflation met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged.
The adjusted gross income (AGI) phaseout range for taxpayers making contributions to an IRA or a Roth IRA has increased, as have the AGI phaseout ranges for the retirement savings contributions credit.
The deduction for an IRA contributor not covered by a workplace retirement plan, but is married to someone who is covered, is phased out if the couple’s income is between $184,000 and $194,000.
The phaseout range for taxpayers making contributions to a Roth IRA is $184,000 to $194,000 for married couples filing jointly. For singles and head of household, the phaseout range is $117,000 to $132,000.
The AGI limit for the saver’s credit for low-and-moderate income workers is $61,500 for married couples filing jointly, $46,125 for head of household and $30,750 for singles and separate filers.