Are you a married couple looking to maximize your 401k contributions for 2023? If so, you’ll need to understand the 401 K contribution limits for the year. This article will help you understand the 401 K contribution limits for married couples filing jointly for 2023.
What are the Contribution Limits for 2023?
The Internal Revenue Service (IRS) sets annual limits on how much an employee can contribute to their 401K. For 2023, the contribution limit is $19,500. If you’re age 50 or older, you can take advantage of the “catch-up” provision and contribute an additional $6,500, for a total of $26,000.
How Much Can a Married Couple Contribute Together?
If you’re married and filing jointly, the contribution limit is the same as if you were filing single. That means you can contribute a combined maximum of $19,500, or $26,000 if you’re both age 50 or older.
Are There Any Other Considerations?
Yes. If you’re married, you may be able to deduct up to $7,500 in contributions from your taxes. To qualify for the deduction, your joint adjusted gross income must be less than $103,000. If it’s more than that, you won’t be able to take the deduction.
Can My Spouse Contribute to My 401K?
Yes. Your spouse can make contributions to your 401K. This is known as a spousal contribution. Your spouse can contribute up to the annual contribution limit of $19,500, or $26,000 if they’re age 50 or older.
Can My Employer Match My Contributions?
Yes, your employer may match your contributions. The amount of the match will depend on your employer’s policy. Some employers may match 100% of your contributions up to a certain amount. Other employers may match a percentage of your contributions.
What Happens If I Exceed the Contribution Limit?
If you exceed the annual contribution limit, you will be subject to a 6% excise tax on the excess amount. You will also have to file a special form with the IRS. It’s important to stay within the contribution limits to avoid these penalties.
Are There Any Other Retirement Accounts I Can Invest In?
Yes. In addition to your 401K, you may also want to consider investing in an Individual Retirement Account (IRA). An IRA is a tax-advantaged retirement account that you can open independently. There are two types of IRAs: traditional and Roth. Both offer tax advantages, so it’s important to understand the differences between the two.
Maximizing your 401K contributions is an important part of planning for retirement. Understanding the contribution limits for married couples filing jointly for 2023 is a critical step in achieving your financial goals. With the right planning and knowledge, you can make the most of your 401K investments.