{"id":1909,"date":"2024-11-07T19:00:26","date_gmt":"2024-11-07T19:00:26","guid":{"rendered":"https:\/\/webfreetools.net\/blog\/irs-announces-increased-401k-contribution-limit-for-2025-ira-limit-remains-unchanged\/"},"modified":"2024-11-07T19:00:26","modified_gmt":"2024-11-07T19:00:26","slug":"irs-announces-increased-401k-contribution-limit-for-2025-ira-limit-remains-unchanged","status":"publish","type":"post","link":"https:\/\/webfreetools.net\/blog\/irs-announces-increased-401k-contribution-limit-for-2025-ira-limit-remains-unchanged\/","title":{"rendered":"IRS Announces Increased 401(k) Contribution Limit for 2025; IRA Limit Remains Unchanged"},"content":{"rendered":"<p>The Internal Revenue Service (IRS) announced an increase in the contribution limit for 401(k) plans in 2025. Individuals can now contribute up to $23,500, up from $23,000 in 2024. Additionally, the IRS has issued updated cost-of-living adjustments affecting various retirement accounts and tax-related items for the upcoming tax year, detailed in Notice 2024-80.<\/p>\n<h3>Key Highlights for 2025:<\/h3>\n<p><strong>401(k) and Other Employer-Sponsored Plans<\/strong><\/p>\n<ul>\n<li>The maximum contribution limit for 401(k), 403(b), governmental 457 plans, and the federal Thrift Savings Plan is raised to $23,500.<\/li>\n<li>The catch-up contribution limit for employees aged 50 and over remains $7,500, allowing those eligible to contribute up to $31,000 in total for 2025.<\/li>\n<li>For employees aged 60-63, a higher catch-up limit of $11,250 applies, as established by the SECURE 2.0 Act of 2022.<\/li>\n<\/ul>\n<p><strong>Individual Retirement Accounts (IRAs)<\/strong><\/p>\n<ul>\n<li>The IRA contribution limit remains at $7,000 for 2025, with a catch-up contribution limit of $1,000 for individuals aged 50 and over.<\/li>\n<\/ul>\n<p><strong>Income Phase-Outs for IRA and Roth IRA Contributions<\/strong><\/p>\n<ul>\n<li><strong>Traditional IRA<\/strong>:\n<ul>\n<li>Single taxpayers with workplace retirement plans face a phase-out range between $79,000 and $89,000, up from $77,000 to $87,000.<\/li>\n<li>For married couples filing jointly, the phase-out range is $126,000 to $146,000 if the contributing spouse is covered by a workplace plan, up from $123,000 to $143,000.<\/li>\n<li>For IRA contributors married to a covered spouse, the phase-out range is $236,000 to $246,000, up from $230,000 to $240,000.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Roth IRA<\/strong>:\n<ul>\n<li>Single filers and heads of household have a phase-out range of $150,000 to $165,000, up from $146,000 to $161,000.<\/li>\n<li>For married couples filing jointly, the range is $236,000 to $246,000, up from $230,000 to $240,000.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Saver\u2019s Credit (Retirement Savings Contributions Credit)<\/strong><\/p>\n<ul>\n<li>The income limits for claiming the Saver\u2019s Credit increased to $79,000 for married couples filing jointly (up from $76,500), $59,250 for heads of household (up from $57,375), and $39,500 for singles and married individuals filing separately (up from $38,250).<\/li>\n<\/ul>\n<p><strong>SIMPLE Retirement Accounts<\/strong><\/p>\n<ul>\n<li>The contribution limit for SIMPLE retirement accounts is increased to $16,500 from $16,000.<\/li>\n<li>For certain SIMPLE accounts, a higher contribution limit of $17,600 remains in effect, per SECURE 2.0 guidelines.<\/li>\n<li>The catch-up contribution limit for employees aged 50 and over in SIMPLE plans remains $3,500, with a higher limit of $3,850 for applicable accounts. For employees aged 60-63, the catch-up limit is $5,250.<\/li>\n<\/ul>\n<p>Full details on these retirement-related adjustments for tax year 2025 are available in Notice 2024-80.<\/p>\n<p>This article, &#8220;<a href=\"https:\/\/smallbiztrends.com\/irs-raises-401k-limit-2025\/\" target=\"_blank\" rel=\"noopener\">IRS Announces Increased 401(k) Contribution Limit for 2025; IRA Limit Remains Unchanged<\/a>&#8221; was first published on <a href=\"https:\/\/smallbiztrends.com\" target=\"_blank\" rel=\"noopener\">Small Business Trends<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Internal Revenue Service (IRS) announced an increase in the contribution limit for 401(k) plans in 2025. Individuals can now contribute up to $23,500, up from $23,000 in 2024. Additionally, the IRS has issued updated cost-of-living adjustments affecting various retirement accounts and tax-related items for the upcoming tax year, detailed in Notice 2024-80. Key Highlights&hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[92],"tags":[98],"class_list":["post-1909","post","type-post","status-publish","format-standard","hentry","category-small-business-news","tag-small-business-news"],"_links":{"self":[{"href":"https:\/\/webfreetools.net\/blog\/wp-json\/wp\/v2\/posts\/1909","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/webfreetools.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/webfreetools.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/webfreetools.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/webfreetools.net\/blog\/wp-json\/wp\/v2\/comments?post=1909"}],"version-history":[{"count":0,"href":"https:\/\/webfreetools.net\/blog\/wp-json\/wp\/v2\/posts\/1909\/revisions"}],"wp:attachment":[{"href":"https:\/\/webfreetools.net\/blog\/wp-json\/wp\/v2\/media?parent=1909"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/webfreetools.net\/blog\/wp-json\/wp\/v2\/categories?post=1909"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/webfreetools.net\/blog\/wp-json\/wp\/v2\/tags?post=1909"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}