While retirement plan contribution limits have not increased for 2016, taking full advantage of allowable contributions and any amounts your employer matches is still a good idea. Contributions you make to employer-sponsored retirement plans reduce your taxable income because your employer deducts the amount you specify from your paycheck before taxes.
For 2016, you can contribute $18,000 to your 401(k), plus another $6,000 if you’re celebrating your 50th or older birthday during 2016. You can save up to $12,500 in your SIMPLE account this year, plus another $3,000 if you’re age 50 or over.
Gilliland & Associates, PC is a full-service CPA firm specializing in tax planning for individuals and businesses in the Northern Virginia area. We are based in Falls Church, VA and also service clients in the McLean and Tysons Corner, VA. Gilliland & Associates specializes known for our superior knowledge and aggressive interpretation and application of tax laws, we help you keep more of your earnings by finding you the lowest possible tax on your business or personal tax return. You can connect with us on Google+, LinkedIn, Facebook, and Twitter.