Older Farmers Can Contribute $30,000 to a 401(k) Plan
The IRS announced last week that all workers who participate in a 401(k) plan will be allowed to contribute $22,500 into a 401(k) plan starting in 2023 an increase of $2,000 from 2022 amounts. For those taxpayers age 50 or over, they could contribute an extra $7,500 an increase of $1,000 from 2022.
This means a farmer can defer up to $30,000 of their salary into a 401(k) plan starting in 2023 if they are least 50.
Taxpayers can also contribute an extra $500 into their IRAs starting in 2023 or a total of $6,500. Remember that this is a combined limited for ROTH and Regular IRAs. For example, you can put $3,000 into a Regular IRA and $3,500 into a ROTH.
The amount that can be put into a SIMPLE plan increases from $14,000 to $15,500.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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