The IRS has raised the IRA contribution limit for 2024 from the 2023 limit of $6,500 to $7,000. The catch up amount for individuals 50 and over stayed at $1,000 and going forward will go up based on cost-of-living adjustments COLA under the SECURE 2.0.
QCD
For 2024, the qualified charitable distributions (QCD )limit is increased to $105,000, up from $100,000 in 2023. This increase results from the new COLA rule under SECURE 2.0 and will apply going forward.
More IRA COLAs
The income phase-out range for individuals making contributions to a Roth IRA is increased to between $146,000 and $161,000 for singles and heads of household, up from between $138,000 and $153,000.
For married couples filing jointly, the income phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000.
The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.
Rules when Contributing to both a Traditional IRA and an Employer 401k Plan Including a Solo 401k Plan
Contributions to a traditional IRA are deductible if certain conditions are met. If during the year either your or your spouse was covered by a retirement plan at work including a self-employed solo 401k plan, the IRA deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work including a solo 401k plan, the phase-outs of the deduction do not apply.) Following are the phase‑out ranges for 2024:
- For single taxpayers covered by a workplace retirement plan including a solo 401k plan, the phase-out range is increased to between $77,000 and $87,000, up from between $73,000 and $83,000.
- For married couples filing jointly, if the spouse making the traditional IRA contribution is covered by a workplace retirement plan including a solo 401k plan, the phase-out range is increased to between $123,000 and $143,000, up from between $116,000 and $136,000.
- For a traditional IRA contributor who is not covered by a workplace retirement plan including a solo 401k plan and is married to someone who is covered, the phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000.
- For a married individual filing a separate return who is covered by a workplace retirement plan including a solo 401k plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.
For more information on cost-of-living adjustments for 2024 , visit Notice 2023-75.
