Tax Article - Pension Plan Limits for Individuals
|
2004 |
2005 |
2006 |
|
Elective Deferrals |
$13,000 |
$14,000 |
$15,000 |
Age 50 Catch Up[1] |
$3,000 |
$4,000 |
$5,000 |
Limit on Defined Benefit Plan |
$165,000 |
$170,000 |
$175,000 |
Limit on Defined Contribution Plan |
$41,000 |
$42,000 |
$44,000 |
Limit on Covered Compensation |
$205,000 |
$210,000 |
$220,000 |
Highly Comp. Employee |
$90,000 |
$95,000 |
$100,000 |
Maximum IRA Contribution |
$3,000 |
$4,000 |
$4,000 |
Age 50 Catch Up |
$500 |
$500 |
$1,000 |
Deductible IRA Phase Out[2] |
$65,000-$75,000 MFJ $45,000-$65,000 Single |
$70,000-$80,000 MFJ $45,000-$65,000 Single |
$75,000-$85,000 MFJ $50,000-$70,000 Single |
Deductible IRA Phase Out Spouse[3] |
$150,000-$160,000 |
$150,000-$160,000 |
$150,000-$160,000 |
Roth IRA Phase Out |
$150,000-$160,000 MFJ $95,000-$110,000Single $100,000 Rollover |
$150,000-$160,000 MFJ $95,000-$110,000 Single $100,000 Rollover |
$150,000-$160,000 MFJ $95,000-$110,000 Single $100,000 Rollover |
IRA Credit 50% Limitation[4] |
$0 - $30,000 MFJ $0 -$22,500 HOH $0 - $15,000 Single |
$0 - $30,000 MFJ $0 -$22,500 HOH $0 - $15,000 Single |
$0 - $30,000 MFJ $0 -$22,500 HOH $0 - $15,000 Single |
IRA Credit 20% Limitation |
$30,001 - $32,500 MFJ $22,501 -$24,375 HOH $15,001 - $16,250 Single |
$30,001 - $32,500 MFJ $22,501 -$24,375 HOH $15,001 - $16,250 Single |
$30,001 - $32,500 MFJ $22,501 -$24,375 HOH $15,001 - $16,250 Single |
IRA Credit 10% Limitation |
$32,501 - $50,000 MFJ $24,376 -$37,500 HOH $16,251 - $25,000 Single |
$32,501 - $50,000 MFJ $24,376 -$37,500 HOH $16,251 - $25,000 Single |
$32,501 - $50,000 MFJ $24,376 -$37,500 HOH $16,251 - $25,000 Single |
Pension Plan Startup Costs Credit |
$500 Credit (50% of Costs) First 3 Years of Plan Less than 100 Employees |
$500 Credit (50% of Costs) First 3 Years of Plan Less than 100 Employees |
$500 Credit (50% of Costs) First 3 Years of Plan Less than 100 Employees |
Maximum Earnings Subject to SS |
$87,900 |
$90,000 |
$94,200 |
SS Earnings Required for Credit |
$900/QTR |
$920/QTR |
$970/QTR |
Retirement Earnings Exempt Under 65[5]* |
$970/MO |
$1,000/MO |
$1,040/MO |
Retirement Earnings Exempt Over 65[6]* |
$2,590/MO |
$2,650/MO |
$2,770/MO |
Maximum SS |
$1,825/MO |
$1,939/MO |
$2,053/MO |
[1] If the individual has attained the age of 50 before the close of the taxable year.
[2] If both spouses are covered by a pension plan.
[3] If only one spouse is covered by a pension plan.
[4] Non-refundable credit, dependents and full-time students are not eligible.
[5] One dollar in benefits will be withheld for every $2 in earnings above the limit (under full retirement age).
[6] One dollar in benefits will be withheld for every $3 in earnings above the limit (year reaches retirement).
*There is no limit on earnings beginning the month an individual attains full retirement age (65 and 6 months for retirees born in 1940; 65 and 8 months for those born in 1941).
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