Abe, I am planning out my final contributions for 2022 with my IRA. How long do I have to submit that for the tax year 2022 and while you’re at it, what are the contribution limits?
What a great time to be planning out those retirement contributions. You are setting yourself up for success! First things first, we need to be mindful that different types of IRA’s are subject to their own set of rules. I have outlined these for you:
First is the Simple or Roth IRA:
- The 2022 Contribution Deadline is the same day that income taxes are due. This year that is April 18th, 2023.
- The 2022 Maximum Allowable IRA Contribution is $6,000. This will increase to $6,500 in 2023.
- If you are 50 years old or older, you are allowed an additional “catch-up” contribution. This can be $1000 for both 2022/2023.
According to the IRS, Publication 590-A, Publication 590-B
Second is the SEP IRA:
- The 2022 SEP IRA Contributions are subject to the business/individual tax return deadline. If using both calendar year and an extension, you can make this contribution as late as October 16th, 2023. Talk to an Abacus Professional for specific detail and dates.
- For self-employed individuals, SEP IRA contributions are limited to 25% of your net earnings from self-employment. This does not include contributions for yourself, which totals up to a maximum of $61,000 for 2022 and $66,000 for 2023.
According to IRS, Publication 560 (2021), Publication 4333 (Rev. 11-2020)
Guessing in the professional world is never a sound strategy, if you have any questions regarding your situation don’t hesitate to reach out. Abacus is here to offer you the best guidance, enabling you to make smarter decisions for you and your business. Let’s get 2023 off to a great start!