2023 401(k) & IRA contribution caps jump

[Kevin Slater]

One upside of inflation, per the IRS:

In 2023, employees can contribute up to $22,500 a year, up from $20,500, to 401(k), 403(b) and other tax-advantaged employer savings plans. The limit on what are called catch-up contributions, for people 50 and older, also rose, to $7,500 from $6,500. That means workers 50 and older can contribute a maximum of $30,000 to those plans next year.

The maximum contributions to individual retirement accounts will rise by $500, to $6,500.  (The IRA catch‑up contribution limit for individuals aged 50 and over is not subject to an annual cost‑of‑living adjustment and remains $1,000.)  The income ranges for determining eligibility to make deductible contributions to traditional IRAs and to contribute to Roth IRAs also increase in 2023.

Kevin Slater

[Kevin Slater]

Also a reminder that  self-employed folk (including escorts) can contribute to a solo 401(k), meaning that you delay paying income tax on those earnings.  We can contribute to IRAs as well.

Kevin Slater

[BuffaloKyle]

Also the federal income tax brackets will see a bigger jump than normal due to inflation. This will apply though to taxes filed in the beginning of 2024 for your 2023 earnings.

https://www.msn.com/en-us/money/taxes/the-irs-adjusted-its-income-tax-brackets-for-2023-e2-80-94you-might-owe-less-in-taxes-next-year/ar-AA13bxFU

Edited October 22, 2022 by BuffaloKyle

[handiacefailure]

I wish they would increase the IRA max by a lot more.   I have a 401K roth but would rather put the excess over what gets matched into a Roth IRA than my Roth 401k just since I can have a lot more control over how it's invested.

 

 

[+ Vegas_Millennial]

On 10/21/2022 at 9:27 PM, Kevin Slater said:

Also a reminder that  self-employed folk (including escorts) can contribute to a solo 401(k), meaning that you delay paying income tax on those earnings.  We can contribute to IRAs as well.

Kevin Slater

Question for @Kevin Slater, can self employed contribute to a solo Roth 401(k)?  (I don't even know if solo Roth 401k exists).

[BeamerBikes]

On 10/23/2022 at 12:51 AM, Vegas_nw1982 said:

Question for @Kevin Slater, can self employed contribute to a solo Roth 401(k)?  (I don't even know if solo Roth 401k exists).

Looks like Kevin missed this... yes there is such a thing.  Unsure what all the catches are.  One you can't double dip over the contribution limits between solo Roth 401k and a solo 401k.  Etc

[Kevin Slater]

That’s on my radar for tax year 2022. 
Kevin Slater 

[Kevin Slater]

1 hour ago, Kevin Slater said:

That’s on my radar for tax year 2022. 
Kevin Slater 

Scratch that.  The plan had to be set up during the calendar year, and employee contributions had to be made in the calendar year as well.

Kevin Slater