Insights

January 8, 2024

New Gifting and Contribution Limit Changes For 2024

In Wealth Strategy

Contributions from: Jay Winston, CFP®

There’s one thing we can always count on at the start of each new year – new contributions and gifting limitations from the IRS. As you begin your planning for the year ahead, we’ve highlighted some of the key 2024 changes to be aware of for retirement accounts, health savings accounts, and gifting.

Individual Retirement Accounts

The annual contribution amount for Traditional and Roth IRAs has increased from $6,500 in 2023, to $7,000 in 2024. The catch-up provision for those age 50 and older is $1,000.

Workplace and Group Retirement Plans

The contributions to workplace retirement plans such as a 401(k), 403(b), and most 457 plans, have increased from $22,500 in 2023 to $23,000 in 2024. The catch-up provision on these plans for employees aged 50 and older will remain the same at $7,500 for 2024.

The contribution limit for self-employed 401(k)s increased to $69,000 in 2024. The catch-up contribution of $7,500 is in addition to the contribution deferral amount for a total of $76,500.

SIMPLE Retirement contribution limits have increased from $15,500 to $16,000, with catch-up contributions remaining the same at $3,500 for 2024.

Health Savings Accounts

HSA contribution limits have increased for self-only from $3,850 in 2023 up to $4,150 in 2024. Family limits have increased from $7,750 to $8,300. Catch up contributions for those 55 and older remains at $1,000. Note that if spouses are both over 55 and want to both make the catch-up contribution, they would need two separate HSA accounts.

Gifting Limitations

The annual gift tax exclusion (the amount that may gift to one individual without needing to file a gift tax return) has increased from $17,000 in 2023 to $18,000 in 2024. The estate and lifetime gift exemption has also increased from $12.92 million to $13.61 million per individual.

Tax Brackets, Standard Deductions and Phase-Outs

Here is a summary of all the information above plus 2024 tax brackets, income limitations, standard deduction amounts ($29,200 for married filing jointly and $14,600 for single filers) and other key information we use on a day-to-day basis to manage your wealth strategies.

Please reach out to your Wealth Management team with questions about how you can leverage these new limits in your financial portfolio.

DISCLAIMER: THIS MATERIAL PROVIDES GENERAL INFORMATION ONLY. COLDSTREAM DOES NOT OFFER LEGAL OR TAX ADVICE. ONLY PRIVATE LEGAL COUNSEL OR YOUR TAX ADVISOR MAY RECOMMEND THE APPLICATION OF THIS GENERAL INFORMATION TO ANY PARTICULAR SITUATION OR PREPARE AN INSTRUMENT CHOSEN TO IMPLEMENT THE DESIGN DISCUSSED HEREIN. CIRCULAR 230 NOTICE: TO ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE IRS, THIS NOTICE IS TO INFORM YOU THAT ANY TAX ADVICE INCLUDED IN THIS COMMUNICATION, INCLUDING ANY ATTACHMENTS, IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING ANY FEDERAL TAX PENALTY OR PROMOTING, MARKETING, OR RECOMMENDING TO ANOTHER PARTY ANY TRANSACTION OR MATTER.

Insights Tags

Related Articles

February 9, 2024

10 Essential Tax Planning Strategies

As the saying goes, “in this world nothing can be said to be certain, except death and taxes.” While we may not have control over the inevitability of taxes, we do have tax planning strategies at our disposal to minimize the impact. When utilized productively, tax planning can be a strategic approach to optimize your [...]

Vince Lee
Contributions from: Vince Lee, CFP®, CPA, Wes Burroughs

December 11, 2023

Preserving Traditions

As the air becomes crisp and the scent of cinnamon and evergreen fills our homes, the holiday season beckons us to gather with loved ones and revel in the warmth of traditions. In a world marked by rapid change and constant innovation, there is a profound beauty in the steadfast nature of holiday customs that [...]

November 14, 2023

Bundling Charitable Contributions to Maximize your Tax Benefits

If you’re reading this article, it’s likely you are charitably inclined, value giving back to the community, and attend fund-raising events for the causes most important to you. Now picture this… you are sitting at a table for your favorite annual gala – the time has come to fill out your donation form and write [...]

Vonie Bright
Contributions from: Vonie Bright, CFP®