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article <\/p>\n article <\/p>\n
FILE-A sign marks the front of the Internal Revenue Service (IRS) headquarters building on January 30, 2024, in Washington, DC. (Photo by J. David Ake\/Getty Images) <\/p>\n
The Internal Revenue Service <\/a>has announced new 401K and individual retirement account contribution limits that take effect next year.\u00a0<\/p>\n In 2026, the amount individuals can contribute to their 401K will increase to $24,500, up from 23,500 this year, according to an IRS release on Thursday<\/a>.<\/p>\n The agency also issued guidance for all cost\u2011of\u2011living adjustments impacting dollar limitations for pension plans and other retirement-related items for 2026.<\/p>\n 401K and IRA contribution limits for 2026 <\/p>\n Why you should care:<\/p>\n The annual contribution limit for workers<\/a> who participate in 401(k), 403(b), governmental 457 plans, and the federal government\u2019s Thrift Savings Plan is increased to $24,500, up from $23,500 for 2025.<\/p>\n For employees 50 years old and older who participate in most 401(k), 403(b), governmental 457 plans, the catch-up contribution limit for these accounts will rise to $8,000 in 2026. \u00a0Additionally, the limit on annual contributions to an IRA has been increased <\/a>to $7,500 from $7,000.\u00a0<\/p>\n RELATED: Report: Trump to end IRS Direct File program for free tax filing<\/a><\/p>\n Meanwhile, there’s an IRA catch-up contribution for people 50 and older, and it includes a cost-of-living adjustment of $1,100, up from $1,000 in 2025.<\/p>\n Income phase-out ranges for Roth IRAs, IRAs, and Saver\u2019s Credit <\/p>\n The IRS explains on its website<\/a> that taxpayers can deduct contributions to a traditional IRA if they meet certain requirements.<\/p>\n IRS officials state that during the year either the taxpayer or the taxpayer\u2019s spouse<\/a> was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, which is contingent on filing status and income. \u00a0<\/p>\n Below is a breakdown of next year’s phase out ranges, according to the IRS.<\/p>\n For single taxpayers<\/a> covered by a workplace retirement plan, the phase-out range is increased to between $81,000 and $91,000, up from between $79,000 and $89,000 for 2025.The IRS notes that married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range rises between $129,000 and $149,000, up from between $126,000 and $146,000 for 2025.According to the agency, for IRA contributors not covered by a workplace retirement plan and who are married to someone who is covered, the phase-out is between $242,000 and $252,000, up from between $236,000 and $246,000 in the current year.A married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.The income phase-out range for taxpayers making contributions to a Roth IRA is increased to between $153,000 and $168,000 for singles and heads of household, up from between $150,000 and $165,000 for 2025.According to the IRS, for married couples filing jointly, the income phase-out range is increased to between $242,000 and $252,000, up from between $236,000 and $246,000 for 2025.And the phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000. <\/p>\n The agency has also raised the income limit for the Saver\u2019s Credit for low- and moderate-income workers, and it is listed below:<\/p>\n The amount is $80,500 for married couples filing jointly, up from $79,000 for 2025.For heads of household, it is $60,375, up from $59,250 for 2025.And the amount is $40,250 for singles and married individuals filing separately, up from $39,500 for 2025. <\/p>\n The Source: Information for this story was provided by an IRS release. \u00a0This story was reported from Washington, D.C.\u00a0<\/p>\n Money<\/a>Economy<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"article FILE-A sign marks the front of the Internal Revenue Service (IRS) headquarters building on January 30, 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