Retirement Plan Limitations for 2012…

CJBS
November 21, 2011
1 MIN READ
by Michael W. Blitstein, CPA  Internal Revenue Service has announced the following limitations for 2012 retirement plans: Employee Deferrals: IRA account - 100% of earned income up to $5,000; age 50 and older catch up $1,000 SIMPLE - 100% of earned income up to $11,500; age 50 and older catch up $2,500 401(k) - $17,000; age 50 and older catch up $5,500 457 Plan - $17,000; age 50 and older catch up $5,500 Defined Contribution Plan The maximum annual contribution for a plan year ending in 2012 is the lesser of 100% of compensation or $50,000.  If a 401(k) contribution is used, those age 50 and older may reach $55,500. Defined Benefit Plan The maximum annual benefit for plan years ending in 2012 is the lesser of 100% of average annual compensation, or $200,000. Definitions Compensation to be used for retirement plan purposes for plan years beginning in 2012 is $250,000. A highly compensated employee is one earning $115,000 or more for plan years beginning in 2012. The social security taxable wage base is $110,100.
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