Tax Information & Schedules

All you need to know to plan for tax efficiency.

It’s important to prepare for tax efficiency year-round. Below you’ll find information to help guide you as you make decisions geared toward minimizing your tax burden. As always, meeting with your financial or tax advisor early and often will ensure your questions are answered.

2020 Year-End Tax Guide VIEW HERE >

2020/2021 Tax Season Guide | VIEW HERE >

2021 LPL Tax Statement Mailing Schedule | 
VIEW HERE >

Tax Reform Basics for Individuals and Families | VIEW HERE >

 

Retirement Plan Contribution Limits

The Internal Revenue Service (IRS) has announced the following retirement plan contribution limits for the 2021 tax year. 2020 contribution limits are listed at the bottom of the page for your reference.

To schedule a complimentary, no-obligation appointment with Northwest Financial Advisors, click here or call us at 703-810-1072 (800-269-2156) x110 to discuss what these new limits may mean for you and your retirement future. We look forward to assisting you.
 

2021 Tax Year:

IRA Contributions

An individual must have received an equivalent amount of earned income during the tax year to contribute to an IRA.

Traditional: $6,000 (unchanged from 2020)

Roth: $6,000 (unchanged from 2020)

Catch-up Contribution (age 50 & older): $1,000 (unchanged from 2020)

Maximum Contribution (age 50 & older): $7,000 (unchanged from 2020)

Traditional IRA Contributions Deductibility Modified Adjusted Gross Income (MAGI) Limits
For individuals covered by (eligible for) an employer-sponsored retirement plan.  If you are not covered by an employer-sponsored plan, there are no income limits.

Single/Head of Household*: $66,000 - $76,000 (up from $65,000 - $75,000 in 2020)

Married, Filing Jointly or Qualifying Widow(er): $105,000 – $125,000 (up from $104,000 – $124,000 in 2020)

Married, Filing Jointly: $198,000 – $208,000 (up from $196,000 – $206,000 in 2020)

Married, Filing Separately: $0 - $10,000 (unchanged from 2020; not subject to a COLA)

*If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the “Single” filing status.

See the chart at IRS.gov.

Roth IRA MAGI Range Income Limits

Married, Filing Jointly or Qualifying Widow(er): $198,000 – $208,000 (up from $196,000 – $206,000 in 2020)

Married, Filing Separately*: $0 - $10,000 (unchanged from 2020; not subject to a COLA)

Single Filer/Head of Household or Married Filing Separately**: $125,000 – $140,000 (up from $124,000 – $139,000 in 2020)

*And lived with your spouse at any time during the year
**And you did not live with your spouse at any time during the year

See the chart at IRS.gov.

 

No Age-Based Limit on IRA Contributions

With the passing of the SECURE Act in late 2019 and effective January 1, 2020, there is no longer an age-based limit on making contributions to a Traditional IRA.

Contributions to a Roth IRA or SEP IRA are still permitted regardless of age as long as the individual making the contribution, or his or her spouse, received an equivalent amount of earned income during the tax year.

Conversions from a Traditional IRA to a Roth IRA are permitted regardless of age and regardless of the amount of earned income.

 

Contributions to 401(k), 403(b) & most 457 plans, as well as the Federal Government’s Thrift Savings Plan (TSP)

Standard limit: $19,500 (unchanged from 2020)

Catch-up contributions (age 50 & older): $6,500 (unchanged from 2020)

Maximum contribution (age 50 & older): $26,000 (unchanged from 2020)
 

For additional information on retirement plan contributions and limits, visit IRS.gov.

 

Social Security Cost-of-Living Adjustment (COLA)

Effective January 1, 2021, Social Security benefits are set to increase by 1.3% for eligible beneficiaries, a slighter lower increase than 2020’s 1.6%.


Federal Pension COLA

Civil Service Retirement System (CSRS): 1.3% increase in 2021, down slightly from 2020’s 1.6% increase but matching the average 1.3% increase over the last decade.

Federal Employees Retirement System (FERS): 1.3% increase in 2021, down slightly from 2020’s 1.6% increase but matching the average 1.3% increase over the last decade.

 

For details on retirement related 2021 COLA adjustments, see COLA Increases for Dollar Limitations on Benefits and Contributions on IRS.gov.

 

 

 

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2019/2020 Tax Season Guide | VIEW HERE >

Tax Reform Basics for Individuals and Families | VIEW HERE >

 

Retirement Plan Contribution Limits

The Internal Revenue Service (IRS) has announced the following retirement plan contribution limits for the 2020 tax year. 2019 contribution limits are listed at the bottom of the page for your convenience.

To schedule a complimentary, no-obligation appointment with Northwest Financial Advisors, click here or call us at 703-810-1072 (800-269-2156) x110 to discuss what these new limits mean for you and your retirement future. We look forward to assisting you.
 

2020 Tax Year:

IRA Contributions

An individual must have received an equivalent amount of earned income during the tax year to contribute to an IRA.

Traditional: $6,000 (unchanged from 2019)

Roth: $6,000 (unchanged from 2019)

Catch-up contribution (age 50 & older): $1,000 (unchanged from 2019)

Maximum contribution (age 50 & older): $7,000

 

Roth IRA Eligibility Phase-Out
Modified Adjusted Gross Income (MAGI) Range

Single filer/head of household: $124,000 – $139,000 (up from $122,000 – $137,000 in 2019)

Married couples, filing jointly: (IRA contributor covered by an employer plan): $104,000 – $124,000 (up from $103,000 – $123,000 in 2019)

Married couples, filing jointly: (IRA contributor not covered by an employer plan & spouse is covered): $196,000 – $206,000 (up from $193,000 – $203,000 in 2019)

Married couples, filing separately: $0 – $10,000 (unchanged from 2019; not subject to a COLA)

 

Age-Based IRA Contributions Limits

With the passing of the SECURE Act in late 2019, effective January 1, 2020, there is no longer an age-based limit on making contributions to a Traditional IRA.

Contributions to a Roth IRA or SEP IRA are still permitted regardless of age, as are conversions to a Roth IRA, as long as the individual making the contribution received an equivalent amount of earned income during the tax year.

Conversions from a Traditional IRA to a Roth IRA are permitted regardless of the amount of earned income.

 

Contributions to 401(k), 403(b) & most 457 plans, as well as the Federal Government’s Thrift Savings Plan (TSP)

Standard limit: $19,500 (a $500 increase from 2019)

Catch-up contributions (age 50 & older): $6,500 (a $500 increase from 2019)

Maximum contribution (age 50 & older): $26,000 (a $1,000 increase from 2019)

 

For additional information on retirement plan contributions and limits, see Retirement Topics – Contributions on IRS.gov

 

Social Security Cost-of-Living Adjustment (COLA)

Effective January 1, 2020, Social Security benefits are set to increase by 1.6% for eligible beneficiaries, lower than 2019’s 2.8% but higher than the 1.4% average over the last decade.


Federal Pension COLA

Civil Service Retirement System (CSRS): 1.6%, down from 2.8% in 2019 but higher than the 1.3% average over the last decade.

Federal Employees Retirement System (FERS): 1.6%, down from 2.0% in 2019 but higher than the 1.3% average over the last decade.

 

For details on retirement related 2020 COLA adjustments, see COLA Increases for Dollar Limitations on Benefits and Contributions on IRS.gov.