As we begin the New Year, we wanted to provide a brief update on contribution and gifting limits, and eligibility requirements for 2021.
Whether you are an active participant in a workplace plan, contributing to an individual retirement plan, or simply planning to do some annual gifting, it is important to be aware of the current regulations, in order to make the proper investment decisions.
If you are an active participant in an employer-sponsored retirement plan, you can contribute the following:
Under 50: $19,500
Age 50 or over: $26,000
SEP IRA or Solo 401(k)
The lesser of $58,000 or 25% of compensation
Under 50: $13,500
Age 50 or over: $16,500
If you are contributing to an Individual Retirement Account:
IRA and ROTH IRA Limits
Under 50: $6,000
Age 50 or over: $7,000
NOTE: There are income phaseout limits for ROTH IRA eligibility
Married/Joint: $198,000 or Less
Single: $125,000 or Less
If you are contributing to a Health Savings Account:
Age 55 or over
If you are gifting to another person:
Gift Tax Exclusion Limit: $15,000
Gifting into 529 or UTMA Accounts, up to $15,000 (or $30,000 per couple) can be gifted annually into those accounts without having to file a federal gift tax return.
Additionally, the 2020 election results increased the potential for changes in tax laws moving forward, both on a corporate and individual level. If any changes come to light, we will keep you informed, and we welcome any discussions about how those would impact you personally.
Investment advice offered through Strauss Financial Group, Inc., a Registered Investment Advisor.
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