Traditional IRA Income
Limits Increased
For 2001, if you are covered by a retirement plan at work, your
deduction for contributions to a traditional IRA will be reduced
(phased out) if your modified adjusted gross income (AGI) is between:
- $53,000 and $63,000 for a married couple filing a joint
return or a qualifying widow(er),
- $33,000 and $43,000 for a single individual or head of
household, or
- $-0- and $10,000 for a married individual filing
a separate return.
For all filers other than married filing a separate return, the
upper and lower limits of the phaseout range increased by $1,000. The
range limits did not change for married individuals filing a separate
return. See Publication 590,
Individual Retirement Arrangements
(IRAs), for more information on IRA deductions.
Annual Additions Limit for
403(b) Plan Increased
Effective January 1, 2001, the maximum amount of contributions
allowed under the general rule for the limit on annual additions for
403(b) plan participants has increased from $30,000 to $35,000.
Publication 571
Revised
Publication 571,Tax Sheltered Annuity Plans (403(b) Plans)
For Employees of Public Schools and Certain Tax-Exempt Organizations,
is undergoing a major revision this year and will not
be available until early March 2001.
In the past, Publication 571
provided information for both the plan
participant and the plan administrator. It will now focus on helping
the participant compute his or her contribution limits by assisting
the participant in determining contribution limits for the current
year and the previous year. Changes to Publication 571
include:
- Worksheets that have been revised to assist the participant
in computing his or her contribution limits,
- Instruction to participants both on preventing excess
contributions and determining if they contributed too much in the
previous year, and
- More information for participants who contribute to both a
403(b) plan and 457 plan.
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