Solo 401k Contributions Up in 2013 as a Result of Inflation
The Solo 401k Contributions are up in 2013 as a result of the cost-of-living increase and inflation. The IRS announced the Solo 401k Contributions, along with other necessary and timely increases to more than two dozen tax benefits.
Solo 401k Contributions Up in 2013
The increase marks the second consecutive year of increase by the Internal Revenue Service.
Not that the IRS has any other choice- an increase had to be made with cost-of-living and inflation levels at an all-time high. As long as inflation levels rise, expect retirement plans contributions to also increase in order to keep pace.
For the self-employed or those who qualify for a Solo 401k plan, this means an opportunity to increase their retirement nest egg. Roth Solo 401k plan holders can also benefit from this increase, but without the taxes.
The Roth Solo 401 k is a sub-account within a regular Solo 401k plan. Contributions are made after-tax. An investor’s earnings can basically grow tax-free, even when they are withdrawn at retirement.
Along with an increased contribution limit, 401(k) investors will be able to take advantage of additional tax benefits. The IRS announced a $1,000 annual increase for the amount that taxpayers are eligible to gift tax-free for 2013. This means taxpayers can gift up to $14,000 tax-free in 2013, as compared to just $13,000 in the year prior.
Related Terms:
- Solo 401k Contributions
- Solo 401k Contribution Deadline
- Solo 401k Contribution Limit
- Roth Solo 401k
- Solo 401k Roth