| NEW
INDIVIDUAL AND EMPLOYEE CONTRIBUTION LIMITS |
| Economic
Growth & Tax Relief Reconciliation Act of 2001
(H.R. 1836) |
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401(k)/403(b)/457* |
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IRA/Roth-IRA
|
SAR-SEP
Plans |
SIMPLE-IRA
Plans
|
| Year |
Regular
Contribution |
Extra
Age 50+ |
Regular
Deferral |
Extra
Age 50+ |
Regular
Deferral |
Extra
Age 50+ |
| 2001 |
$2,000 |
$0 |
$10,500* |
$0 |
$6,500 |
$0 |
| 2002 |
$3,000 |
$500 |
$11,000 |
$1,000 |
$7,000 |
$500 |
| 2003 |
$3,000 |
$500 |
$12,000 |
$2,000 |
$8,000 |
$1,000 |
| 2004 |
$3,000 |
$500 |
$13,000 |
$3,000 |
$9,000 |
$1,500 |
| 2005 |
$4,000 |
$500 |
$14,000 |
$4,000 |
$10,000 |
$2,000 |
| 2006 |
$4,000 |
$1,000 |
$15,000 |
$5,000 |
(indexed) |
$2,500 |
| 2008 |
$5,000 |
$1,000 |
(indexed) |
(indexed) |
|
(indexed) |
| 2009 |
(indexed) |
$1,000 |
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*457
plans were limited to $8,500 in 2001
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Maximum
Contribution for either IRA or ROTH-IRA
is $3,000 plus $500 age 50 (2003/2004).
You
can't do maximum for both, but you can do some of
each one up to a total of $3,000 plus $500.
|
Increase
in Maximum Contribution limit per employee
starting in 2002
*The
maximum employee salary deferral (401(k), 403(b),
457, SAR-SEP) percentage limit has
been
increased from 20% to 100% of pay.
*The
maximum SEP-IRA & Profit Sharing contribution
dollar limit per employee from all sources
(deferrals, match,
profit sharing, etc.) is:
2002
$40,000
plus $1,000 for age 50 catch-up = $41,000 Total
2003
$40,000
plus $2,000 for age 50 catch-up = $42,000 Total
2004
$41,000
plus $3,000 for age 50 catch-up = $44,000 Total
*The
maximum SEP-IRA & Profit Sharing percentage
limit is increased from 15% to 25% of employee
pay.
New
IRA/Retirement Plan Rules for Transfers and
Rollovers starting in 2002
*457
plans for city & state employees can now be
transferred or rolled over tax deferred to any
other retirement account.
Previously all distributions from a 457
plan were taxable and could not be rolled
over to an IRA.
*401(k),
403(b) and profit sharing plans can now accept
transfers from any other
retirement plan (IRA, 457, 403(b), SEP) which
previously were not allowed.
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| Low
Income Tax Credit for Retirement Contributions
(Only 2002-2006)
To
encourage low-income taxpayers to make
contributions to IRA, Roth-IRA, 401(k) & other
retirement plans.
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Based
on Adjusted Gross Income (AGI)
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Head
of |
|
Maximum |
Maximum |
| Credit
% |
Single |
Household |
Joint |
Contribution |
Tax
Credit* |
| 50% |
Up
to $15,000 |
Up
to $22,500 |
Up
to $30,000 |
$2,000 |
$1,000 |
| 20% |
$15,001-$16,250 |
$22,501-$24,375 |
$30,001-$32,500 |
$2,000 |
$200 |
| 10% |
$16,251-$25,000 |
$24,376-$37,500 |
$32,501-$50,000 |
$2,000 |
$100 |
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*Claimed
on tax return |
©
Harry Rubins 2003 All Rights Reserved 707-538-8009 |
harry/speaking
info/new ind & empl rev 10/03
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