Higher IRA income limits. 401(k) Participants can make an additional tax-deferred contributions to an IRA, of up to $5,500 ($6,500 if age 50 or older) in 2017, if they earn up to $62,000 ($99,000 for couples).
The tax deduction is phased out for those earning between $62,000 to $72,000 ($99,000 to $119,000 for couples). For individuals who don't have a 401(k) account, but who's spouse does, the tax deduction is gradually reduced if the couple's income is $186,000 to $196,000. Workers who don't have access to a 401(k) or similar type of workplace retirement account can claim a tax deduction for their traditional IRA contributions regardless of their income.
Larger Roth IRA income cutoffs. Employees earning less than $118,000 ($186,000 for couples) can make Roth IRA contributions in 2017. Roth IRA eligibility is phased out for those earning between $118,000 and $133,000 ($186,000 to $196,000 for couples) in 2017.
Higher income threshold for the saver's credit. Employees who earn less than $31,000 in 2017 ($62,000 for couples) might qualify for a tax credit that is worth between 10 and 50 percent of 401(k) and IRA contributions up to $2,000 for individuals and $4,000 for couples.
Special rules for victims of Hurricane Matthew. Victims of Hurricane Matthew will be allowed to withdraw from their retirement account without the usual restrictions to pay for storm-related costs, including food and shelter.
Employees who live or work in the parts of North Carolina, South Carolina, Georgia and Florida affected by the hurricane will be allowed to fast-track hardship distributions and loans from 401(k)s, 403(b)s and other types of workplace retirement accounts.
IRA participants may also be able to take hardship distributions, but not loans under the new rules.
If you live outside the disaster area you can also take a loan or hardship distribution from your retirement account to assist a child, parent or grandparent who lives or works in the disaster area.
Questions about the New Rules? Contact us today!
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