Making Kids Money Masters
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
By Carmela Cavallo
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