New 401(k) contribution limits for 2024
In 2024, individuals will be able to contribute more to their 401(k) plans, up to $23,000. The same is true for 403(b) plans and most 457 plans. This is up from $22,500 in 2023. The increase is part of cost-of-living adjustments made annually. The catch-up contribution limit for employees who have reached age 50 and over who participate in these plans is $7,500 for 2024 (and 2023). So, the total allowable contribution for 2024 for those 50 and over will be $30,500.
For those with IRAs, the contribution limit for 2024 will rise to $7,000 (from $6,500 for 2023). The IRA catch-up contribution for those age 50 and over remains $1,000. Click here for more from the IRS about 2024 retirement plan contributions.
Be charitable and collect tax benefits with your IRA
Eligible IRA owners who are charitably inclined may be able to achieve two goals at once. Using a transfer known as a qualified charitable distribution (QCD), taxpayers who are at least 70½ can transfer up to $100,000 per year to a 501(c)(3) tax-free. Married couples where both spouses meet the age requirement and have IRAs can donate up to $200,000 per year. They can’t take a charitable deduction, but the donated amount is removed from their taxable income, which may make them eligible for other tax breaks. And for taxpayers who are at least age 73 by year end, a QCD donation can be counted as part of the IRA owner’s annual required minimum distribution. Contact us with questions.
Don’t fall for charity scams
Around the world, natural disasters and violent conflicts with civilian victims continue to happen, and generous donors are eager to help. But before you donate to a disaster-related charity, check it out, the IRS warns. Unfortunately, criminals respond to our desire to help by posing as legitimate charities to solicit donations. When that happens, the proceeds don’t go to those in need and the donors can’t deduct their donations on their tax returns. Fake charities often have names that are very similar to legitimate ones, so be sure to carefully check the name before donating. For more tips from the IRS on how to avoid fake charities, click here.