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Tax Limits for 2017

February 27, 2017

Every year, the IRS announces income limits for the next calendar year. The changes are very minor and may only affect the income limits in 2017. The total amount you can contribute to either a Roth IRA or a Traditional IRA will remain the same at $5,500. People over 50 years old can contribute an additional $1,000 which totals to $6,500.

The Social Security tax rate of 6.2% for employees and employers remains the same for 2017. However, the maximum amount of earnings are in fact subjected to Social Security tax. Social Security tax is rising significantly from $118,500 to $127,200. Benefits of Social Security are approximately 60 million retired and disabled workers and their dependents. This will increase slightly in 2017, but for many beneficiaries, the minuscule 0.3% cost-of-living adjustment will be wiped out by higher Medicare premiums. [1]

 

2017[1] 2016[2]
Roth IRA Contribution Limit $5,500 $5,500
Roth IRA Contribution Limit if 50 or over $6,500 $6,500
Traditional IRA Contribution Limit $5,500 $5,500
Traditional IRA Contribution Limit if 50 or over $6,500 $6,500
Roth IRA Income Limits (for single filers) Phase-out starts at $118,000; ineligible at $133,000 Phase-out starts at $117,000; ineligible at $132,000
Roth IRA Income Limits (for married filers) Phase-out starts at $186,000; ineligible at $196,000 Phase-out starts at $184,000; ineligible at $194,000

 

 

 

[1] https://www.irs.gov

[2] https://www.irs.gov

[3] https://www.irs.gov

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