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November 22, 2023

Solo 401(k) and Individual Retirement Arrangement (IRA) are just some of the retirement plans that self-employed individuals, small business owners, or independent contractors may want to have for self-initiated savings for the future. And there will be more savings opportunity for your retirement as the Internal Revenue Service (IRS) announced an increase in these plans’ contribution limits and phase-out ranges for the upcoming year. 


Increase in Contribution Limits 

Presented below are the contribution limits for Solo 401(k) and IRA. Catch-up adjustment limit for employees aged 50 and over will remain the same in 2024 at $7,500 and $1,000 for Solo 401(k) and IRAs, respectively. 

Solo 401(k) 20242023
Employee Contribution Limit $23,000 $22,500 
Employee Contribution Limit with catch-up adjustment (for aged 50 and over) $30,500 $30,000 
Individual Retirement Arrangements (IRAs) 20242023
Annual Contribution Limit  $7,000 $6,500
Annual Contribution Limit with catch-up adjustment (for aged 50 and over)  $8,000 $7,500

Phase-out Ranges for Traditional IRAs  

Contributions to traditional IRAs are generally tax deductible. However, if you or your spouse receives retirement coverage from work, its deductibility may be reduced or phased out depending on your filing status and income. Favorably, the income phase-out range is also higher for 2024. 

Filing Status Phase-out Range 
2024 2023 
Single Filers covered by workplace retirement plan $77,000 and $87,000 $73,000 and $83,000 
Married Filing Jointly covered by a workplace retirement plan $123,000 and $143,000 $116,000 and $136,000 
Married Filing Jointly (spouse is covered by a workplace retirement plan)  $230,000 and $240,000 $218,000 and $228,000 
Married Filing Separately covered by a workplace retirement plan $0 and $10,000 $0 and $10,000 

Phase-out Ranges for ROTH IRAs  

Contributions to ROTH IRAs may have no outright tax benefit but this type of plan allows you to receive tax-free distributions during retirement. However, this type of plan is not made for the high-income earners as individuals with earnings exceeding the income threshold for ROTH IRAs are not allowed to make a contribution. The good news is there’s a workaround to this income limit by using a backdoor ROTH IRA. And on top of that, the phase out-range for ROTH IRA contributors will also increase in 2024. 

Filing Status Phase-out Range  
2024 2023 
Single Filers and Head of Household $146,000 and $161,000 $138,000 and $153,000 
Married Filing Jointly $230,000 and $240,000 $218,000 and $228,000 
Married Filing Separately $0 and $10,000 $0 and $10,000 

Still don’t have a retirement plan? Interested in ROTH but not eligible? Our tax consultant and retirement expert can help you navigate and choose the best retirement plan that will work for your specific situation and needs. Book a consultation now. 

Want to learn more? 

You may want to consult and work with 1099 Accountant – We offer online bookkeeping, online advisory services and online tax and accounting services. We offer reasonable rates. We only work with independent contractors, freelancers, and one-person business. We work with locum tenens from California to New York City and everywhere in between. Yes, even Hawaii! 

Contact us toll-free (855)529-1099 or make an appointment for a free consultation. Contact Us

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