Tax Article - Pension Plan Limitations
Effective January 1, 2005, the limitation on the annual contributions to different plans has increased. Below is an updated Pension and IRA Quick Reference Table (2003-2005).
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|
2003 |
2004 |
2005 |
Compensation Limit [IRC
Sec. 401(a)(17)] |
$ 200,000 |
$ 205,000 |
$ 210,000 |
Defined Benefit Plan Annual
Benefit Limit |
$ 160,000 |
$ 165,000 |
$ 170,000 |
Defined Contribution Plan
Annual Contribution Limit |
$ 40,000 |
$ 41,000 |
$ 42,000 |
401(k), 403(b), and SARSEPs |
|
|
|
Annual Deferral Limit(a) |
$ 12,000 |
$ 13,000 |
$ 14,000 |
Catch-up Contribution(b) |
$ 2,000 |
$ 3,000 |
$ 4,000 |
457 Plan |
|
|
|
Annual Deferral Limit |
$ 12,000 |
$ 13,000 |
$ 14,000 |
Catch-up Contribution(b) |
$ 2,000 |
$ 3,000 |
$ 4,000 |
SIMPLE Plan |
|
|
|
Annual Deferral Limit |
$ 8,000 |
$ 9,000 |
$ 10,000 |
Catch-up Contribution(b) |
$ 1,000 |
$ 1,500 |
$ 2,000 |
IRA |
|
|
|
Annual Contribution Limit |
$ 3,000 |
$ 3,000 |
$ 4,000 |
Catch-up Contribution(b) |
$ 500 |
$ 500 |
$ 500 |
Highly Compensated Employee
Compensation Threshold |
$ 90,000 |
$ 90,000 |
$ 95,000 |
Key
Employee Officer Compensation Threshold |
$ 130,000 |
$ 130,000 |
$ 135,000 |
Traditional IRA Deduction
Phaseout AGI |
|
|
|
SEP Compensation Threshold |
$ 450 |
$ 450 |
$ 450 |
Joint Return |
$60,000/70,000 |
$65,000/75,000 |
$70,000/80,000 |
Single, Head of Household (HOH) |
$40,000/50,000 |
$45,000/55,000 |
$50,000/60,000 |
Married Filing Separately (MFS) |
$0/10,000 |
$0/10,000 |
$0/10,000 |
Social Security Tax Wage
Base |
$87,000 |
$87,900 |
$90,000 |
Control Employee
Compensation Limit |
$80,000
and $160,000 |
$80,000
and
$165,000 |
$85,000
and
$170,000 |
(a) This applies to the total of all elective deferrals an individual makes for the year, including those made to 401(k) plans, 403(b) plans, SARSEPs, and SIMPLE plans. However, deferrals to each SIMPLE plan in which the individual participates are also limited, as shown later in the table.
(b) Catch-up contributions are available each year to individuals who reach age 50 by the end of the year.
Source: Practitioners Publishing Company. Practitioners Tax Action Bulletins, Five-Minute Tax Briefing, Tax Action Memo, and NATIONAL TAX ADVISORY® are trademarks used herein under license. For subscription information, call (800) 323-8724. This publication is designed to provide accurate information on the subject matter covered. The publisher is not engaged in rendering professional advice or service. If such expert assistance is required, the services of a competent professional should be sought.
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