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The IRS Announce IRA Contribution Limits for 2020

The IRS Announce IRA Contribution Limits for 2020

Estimated reading time: 1.5 minutes

The IRS recently released the IRA contribution limits and income thresholds for 2020. If you haven’t contributed to your Self-Directed IRA yet, consider doing so before the tax deadline to maximize your tax benefits. The tax deadline is April 15, 2020. 

Use this chart to determine the IRA contribution and deduction limitations for your individual (Traditional and Roth IRAs), small business/self-employed (SIMPLE and SEP IRAs), or other tax-advantaged retirement plan(s) (ESAs and HSAs):

 

INDIVIDUAL RETIREMENT PLANS

Traditional IRA and Roth IRA Contribution Limits 2019 2020
Up to age 50 $6,000 $6,000
Catch-Up Contributions Age 50+  $1,000 $1,000
Total Contribution if Over the Age of 50  $7,000 $7,000
Roth IRA Contribution Limits MAGI Phase-Out Ranges 2019 2020
Single Individuals $122,000 - $137,000 $124,000 - $139,000
Married, Filing a Joint Tax Return $193,000 - $203,000 $196,000 - $206,000
Married, Filing Separate Tax Returns $0 - $10,000 $0 - $10,000
Traditional IRA Modified Adjusted Gross Income Limits 2019 2020
Single Individuals $64,000 - $74,000 $65,000 - $75,000
Married, Filing a Joint Tax Return $103,000 - $123,000 $104,000 - $124,000
Married, Filing Separate Tax Returns $0 - $10,000 $0 - $10,000
Spouse of an Active Participant $193,000 - $203,000 $196,000 - $206,000

 

SMALL BUSINESS RETIREMENT PLANS

SIMPLE IRA Contribution Limits 2019 2020
Employee Elective Deferrals $13,000 $13,500
Catch-Up Elective Deferral Contribution Age 50+ $3,000 $3,000

Your employer can elect from two different contribution methods. Check with your employer which option they have chosen. Employer contributions are in addition to your elective deferrals.

SEP IRA Contribution Limits 2019 2020
SEP Employer Contribution Limits Up to 25% of compensation, with a maximum of *$ Up to 25% of compensation, with a maximum of **$
SEP Current Year Compensation Limits *$56,000 **$57,000
Individual 401(k) Plan and Individual Roth 401(k) 2019 2020
Employer Contributions Up to $56,000 Up to $57,000
Employee Elective Deferrals Up to $19,000 Up to $19,500
Catch-Up Elective Deferral Contribution Age 50+ Up to $6,000 Up to $6,500

The employer can contribute up to 25% of your compensation up to the maximum limit.  Employer contributions and employee elective deferrals combined may not exceed $56,000 for 2019 and $57,000 for 2020. Compensation limits and deductibility apply so contact your employer for further information.

 

OTHER TAX-ADVANTAGED PLANS

Coverdell ESA Contribution Limits 2019 2020
Per year until the child is age 18, unless the child has special needs. $2,000 $2,000
Health Savings Accounts (HSA) Contribution Limits 2019 2020
Single Coverage $3,500 $3,550
Family Coverage $7,000 $7,100
HSA High Deductables/Out of Pocket Limits 2019 2020
Single Coverage - Minimum/Maximum $1,350 / $6,750 $1,350 / $6,900
Family Coverage - Minimum/Maximum $2,700 / $13,500 $2,700 / $13,800

 

Looking for an easy way to take to the 2020 contribution limits with you? Download our PDF.

Self-Directed IRA Basics Report

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