When does IRA contribution limit increase?

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Exafchick
Posts: 128
Joined: Thu Nov 09, 2017 10:40 am

When does IRA contribution limit increase?

Post by Exafchick » Fri Jan 12, 2018 9:27 am

Hello, all! I don't turn 50 until Dec of this year but my Vanguard account already notes the IRA limit for this year is $6500. So just to make sure I don't over-contribute, the increase happens at the beginning of the year you turn 50 and not after the birthday? Not complaining just want to verify.

Thank you!

Da5id
Posts: 2035
Joined: Fri Feb 26, 2016 8:20 am

Re: When does IRA contribution limit increase?

Post by Da5id » Fri Jan 12, 2018 9:40 am

If you look here: https://www.irs.gov/publications/p590a

You will find that it is clear on the point. In the Q&A section it says:
$6,500 if you were age 50 or older by the end of 2016,

Exafchick
Posts: 128
Joined: Thu Nov 09, 2017 10:40 am

Re: When does IRA contribution limit increase?

Post by Exafchick » Fri Jan 12, 2018 9:42 am

Da5id wrote:
Fri Jan 12, 2018 9:40 am
If you look here: https://www.irs.gov/publications/p590a

You will find that it is clear on the point. In the Q&A section it says:
$6,500 if you were age 50 or older by the end of 2016,
Great! Thank you for the link also!

kaneohe
Posts: 4833
Joined: Mon Sep 22, 2008 12:38 pm

Re: When does IRA contribution limit increase?

Post by kaneohe » Fri Jan 12, 2018 9:52 am

From Pub 590A p.6:
"Example. Kristin, a full-time student with no taxable
compensation, marries Carl during the year. Neither of
them was age 50 by the end of 2016.
For the year, Carl
has taxable compensation of $30,000. He plans to contribute
(and deduct) $5,500 to a traditional IRA. If he and
Kristin file a joint return, each can contribute $5,500 to a
traditional IRA. "

Sorry I couldn't find a direct B&W response to your question. However the quote above suggests to me that end of yr age is what counts as it does for most (but not all) age related tax stuff. If you are a real worrier, I can see how this answer is not completely satisfactory so worry on :happy . I'm on the border of being a real worrier so completely understandable. Perhaps someone can find a direct answer.

https://www.irs.gov/pub/irs-pdf/f1040.pdf as another example see line 39a on the 1040. It asks

39a Check
if: { You were born before January 2, 1952,
Remember this is the 2016 returns and it's a bit convoluted, but it's really asking you if you 65 before yr end 2016 so see if you get an additional deduction.

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obafgkm
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Location: Pennsylvania

Re: When does IRA contribution limit increase?

Post by obafgkm » Fri Jan 12, 2018 10:05 am

Here it is in black and white from the Internal Revenue Service:

Retirement Topics - Catch-Up Contributions
Internal Revenue Service wrote:Individuals who are age 50 or over at the end of the calendar year can make annual catch-up contributions.
Internal Revenue Service wrote:IRA Catch-Up Amounts

You can make catch-up contributions to your traditional or Roth IRA up to $1,000 in 2015 - 2018. Catch-up contributions to an IRA are due by the due date of your tax return (not including extensions).
As long as one is 50 years old on or before December 31, one can make catch-up contributions anytime during the year.

Exafchick
Posts: 128
Joined: Thu Nov 09, 2017 10:40 am

Re: When does IRA contribution limit increase?

Post by Exafchick » Fri Jan 12, 2018 10:57 am

obafgkm wrote:
Fri Jan 12, 2018 10:05 am
Here it is in black and white from the Internal Revenue Service:

Retirement Topics - Catch-Up Contributions
Internal Revenue Service wrote:Individuals who are age 50 or over at the end of the calendar year can make annual catch-up contributions.
Internal Revenue Service wrote:IRA Catch-Up Amounts

You can make catch-up contributions to your traditional or Roth IRA up to $1,000 in 2015 - 2018. Catch-up contributions to an IRA are due by the due date of your tax return (not including extensions).
As long as one is 50 years old on or before December 31, one can make catch-up contributions anytime during the year.
That makes it clear. I figured I wouldn't be able to do the catch up until AFTER I turned 50 but this gives me almost a year extra! Guess this is one benefit of turning 50!

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