The IRS recently announced that the contribution limits for 401(k), 403(b), most 457 plans, and the Thrift Savings Plan will increase to $20,500 in 2022 (an increase of $1,000 from the current $19,500 limit). Limits on contributions to traditional and Roth IRAs remain unchanged at $6,000.
Deductions for Traditional IRA Contributions
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If neither the taxpayer nor their spouse is covered by a retirement plan at work, their full contribution to a traditional IRA is deductible. If the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced or phased out until it is eliminated. The amount of the deduction depends on the taxpayer's filing status and their income.
Traditional IRA income phase-out ranges for 2022:
$68,000 to $78,000 - Single taxpayers covered by a workplace retirement plan.
$109,000 to $129,000 - Married couples filing jointly. This applies when the spouse making the IRA contribution is covered by a workplace retirement plan.
$204,000 to $214,000 - A taxpayer not covered by a workplace retirement plan married to someone who is covered.
$0 to $10,000 - Married filing a separate return. This applies to taxpayers covered by a workplace retirement plan.
ROTH IRA contributions income phase-out ranges for 2022:
$129,000 to $144,000 - Single taxpayers and heads of household.
$204,000 to $214,000 - Married, filing jointly.
$0 to $10,000 - Married, filing separately.
Saver's Credit income phase-out ranges for 2022 are:
$41,000 to $68,000 - Married, filing jointly.
$30,750 to $51,000 - Head of household.
$20,500 to $34,000 - Singles and married individuals filing separately.
For more information, see IRS Notice 2021-61.