IRS Announces Retirement Plan Contribution Limits for 2022 by Tomoko Shoji, CPA/PFS, CFP

Posted on December 08, 2021 by Tomoko Shoji

The IRS recently released its cost-of-living adjustments for retirement savers in 2022, increasing the annual contribution limits for those with 401(k), 403(b), most 457 plans and SIMPLE IRAs, while also raising the income range for individuals to qualify for deductible contributions to traditional IRAs.

Employer-Sponsored Plans

The maximum salary deferral for 2022 contributions to employer-sponsored 401(k), 403(b), and most 457 plans increase to $20,500, up for $19,500 in 2021. Catch-up contributions for employees age 50 and older remain unchanged at $6,500, allowing those individuals to contribute as much as $27,000 to their qualifying plans in 2022.

For individuals with SIMPLE retirement accounts (also known as SIMPLE IRAs), the maximum contribution for 2022 increases to $14,000, from $13,500 in 2021.

Employees have until Dec. 31, 2021, to max out their retirement account contributions for 2021. Business owners with Schedule C income generally have until April 15, 2022, to make the 2021 salary deferral contribution to their plans as well as an employer match.

Individual Retirement Accounts (IRAs)

For 2022, the limit on IRA and Roth IRA contributions remains unchanged at $6,000, plus an additional $1,000 for those taxpayers age 50 and older. What is new is increased income ranges taxpayers may use to determine their eligibility to claim deductions for their 2022 IRA contributions. In general, IRA contributions are deductible when taxpayers or their spouses are covered by retirement savings plans at work. Depending on the taxpayer’s filing status and income, the amount of the deduction may be reduced or phased out completely.

Similarly, the IRS increased the income phase-out range for taxpayers making contributions to Roth IRAs to $129,000 to $144,000 for singles and heads of household, up from $125,000 to $140,000. For married couples filing jointly, the income phase-out range increases in 2022 $204,000 to $214,000, up from $198,000 to $208,000. If a taxpayer earns too much income to contribute to a Roth IRA in 2022, they may instead contribute to a traditional IRA and later convert that account to a Roth for the benefit of tax-free distributions after reaching age 59½, provided they own the Roth IRA for a minimum of five years.

Taxpayers have until the tax-filing deadline to make their IRA contributions for the prior tax year. Consequently, contributions intended for 2021 must be made by April 15, 2022, barring any postponements to the filing deadline.

About the Author: Tomoko Shoji, CPA, CFP, PFS, is a senior manager of Tax Services with Berkowitz Pollack Brant Advisors + CPAs, where she provides income and estate-tax planning and compliance service to high-net-worth families and closely held businesses in the U.S. and abroad. She can be reached at the CPA firm’s Ft. Lauderdale, Fla., office at  (954) 712-7000 or via email at