More 2007 COLAs Issued for IRAs, HSAs, Saver’s Tax Credit

November 9, 2006 – IRS has released Revenue Procedure (Rev. Proc.) 2006-53, which outlines various cost-of-living increases for tax year 2007. Adjustments are made to certain figures associated with Traditional IRA deductions, Roth IRA contributions, health savings accounts, and the contribution (saver’s) tax credit. The 2007 limits are as follows.

Traditional IRA deduction modified adjusted gross income (MAGI) phase-out ranges

  • Single active participant, $52,000-$62,000
  • Married active participant filing a joint income tax return, $83,000-$103,000
  • Married active participant filing separate tax return, $0-10,000
  • Spouse of an active participant, $156,000-$166,000

Roth IRA contribution MAGI phase-out ranges

  • Single individuals, $99,000-$114,000
  • Married filing a joint income tax return, $156,000-$166,000
  • Married filing separate tax returns, $0-$10,000

HSA limits

  • High deductible health plan (HDHP) deductible of at least $1,100 for self-only coverage and $2,200 for family coverage, and out-of-pocket expense not exceeding $5,500 for self-only coverage and $11,000 for family coverage
  • Contribution limit, HDHP deductible up to $2,850 for self-only coverage and $5,650 for family coverage (the 2007 statutory limit for catch-up contributions is $800)

Saver’s tax credit

  • For income limit increases associated with the saver’s income tax credit for IRA contributions and deferrals in retirement plans, see page 9 of Rev. Proc. 2006-53.

Rev. Proc. 2006-53 may be accessed as follows.
http://www.irs.gov/pub/irs-drop/rp-06-53.pdf