IRA & RETIREMENT CONTRIBUTION LIMITS
• Regular IRA - $5,000 for 2008 and 2009. WITH Additional "Catchup" of $1,000 for those 50 and over for 2008 & 2009.
• 401(k)- $15,500 for 2008 & $16,500 for 2009. With additional Additional "Catchup" of $5,000 for 2008 and $5,500 for 2009.
• Simple IRA - $10,500 for 2008 and $11,500 for 2009. With Additional "Catchup" of $2,500 in 2008 & 2009 for those 50 and over.
• ROTH IRA - $5,000 for 2008 and 2009. Additional "Catchup" $1,000 for those 50 and over in 2008 & 2009.
• RETIREMENT PLANS INCLUDING "KEOGH PLANS" - limit of $46,000 for
2008, and $49,000 for 2009.
...Now EITHER pension (money purchase) plan OR
profit sharing plan can contribute
.......full 25%. (Used to require
combination of both plans to reach 25%)
...Now IRA can be used as "conduit"
between two qualified plans. (Before couldn't
.......transfer back out of
IRA to newer employer qualified plan).
• TAX SHELTERED ANNUITIES (Public Schools & Churches) - $15,500
for 2008 and $16,500 for 2009. Additional "Catchup" for those 50 and over is
$5,000 for 2008 and $5,500 for 2009.
...a TSA can be rolled over into
another qualified plan (not just IRA or TSA).
• Sec 457 plans - $15,500 for 2008 and $16,500 for 2009. Limit is increased to twice this limit in the three years prior to retirement. Additional "Catchup" is $5,000 for those 50 and over in 2008 and $5,500 for 2009.
*****The above limits are subject to other limitations that can reduce or eliminate any allowable contribution. Substantial penalties apply to "excess contributions." Having more than one plan or type of retirement contribution or IRA can reduce or eliminate allowable contribution
*****IRA or retirement contributions only apply to W-2 compensation, or to self-employment income that is subject to Social Security and Medicare tax. Income from interest, dividends, rentals, etc. do not justify any retirement contributions.
***You can only do what your individual plan rules allow.
Home (Index) page | Personal Income Tax Topics| Information For Business Owners