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The Internal Revenue Service (IRS) has announced new limits for specific retirement accounts for the upcoming year. Remember, this update is purely informational. Always consult a tax professional before altering your 2024 tax plan.
Individual Retirement Accounts (IRAs)
For 2024, Traditional IRA contribution limits increase by $500 to $7,000. Those over 50 can add $1,000 more, totaling $8,000. You must start taking minimum distributions from a Traditional IRA at age 73. Withdrawals before age 59½ may incur a 10% tax penalty.
Roth IRAs: Changes and Requirements
Roth IRA contribution phase-outs rise for single filers and heads of household, now $146,000-$161,000. For joint filers, it’s $230,000-$240,000. The range remains $0-10,000 for married individuals filing separately. To withdraw from a Roth IRA tax-free and penalty-free, meet a five-year holding requirement and be over 59½. Other conditions, like the owner’s death, also allow for these withdrawals.
Enhancements in Workplace Retirement Accounts
In 2024, 401(k), 403(b), and similar plans see a $500 limit increase to $23,000. People 50+ can contribute an additional $7,500, making their limit $30,500. At age 73, you’re required to start taking distributions from these plans. Early withdrawals could lead to a 10% tax penalty.
SIMPLE IRAs and Their New Threshold
2024 brings a $500 rise in SIMPLE IRA limits, now $16,000. Similar to traditional IRAs, distributions must start at age 73. Early withdrawals are taxed and may incur penalties.
This article is for informational purposes only. Always seek advice from a tax professional before making changes to your 2024 tax strategy.
