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By Sally P. Schreiber, J.D.
The IRS said Wednesday that the limit on elective deferral contributions to Sec. 401(k) plans, Sec. 403(b) plans, most Sec. 457 plans, and the federal government’s Thrift Savings Plan will increase from $19,000 in 2019 to $19,500 in 2020. The catch-up contribution limit for those 50 and older will increase to $6,500 from $6,000 in 2019 (Notice 2019-59). Most other inflation-adjusted amounts related to pensions will increase from 2019 to 2020.
The maximum deductible individual retirement arrangement (IRA) contribution for 2020 will stay the same at $6,000. The ability of taxpayers who are covered by workplace retirement plans to make a deductible IRA contribution will phase out for singles and heads of household who have adjusted gross incomes (AGIs) between $65,000 and $75,000, a slight increase from last year.