Employee/individual contribution limits
| Elective deferral limits | 2011 | 2012 |
|---|
| 401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs 1 (Includes Roth 401(k) and Roth 403(b) contributions) | Lesser of $16,500 or 100% of participant’s compensation | Lesser of $17,000 or 100% of participant’s compensation |
| SIMPLE 401(k) plans and SIMPLE IRA plans1 | Lesser of $11,500 or 100% of participant’s compensation | Lesser of $11,500 or 100% of participant’s compensation |
1 Must aggregate employee contributions to all 401(k), 403(b), SAR-SEP, and SIMPLE plans of all employers. 457(b) plan contributions are not aggregated. For SAR-SEPs, the percentage limit is 25% of compensation reduced by elective deferrals (effectively, a 20% maximum contribution).
| IRA contribution limits | 2011 | 2012 |
|---|
| Traditional IRAs | Lesser of $5,000 or 100% of earned income | Lesser of $5,000 or 100% of earned income |
| Roth IRAs | Lesser of $5,000 or 100% of earned income | Lesser of $5,000 or 100% of earned income |
| Additional “catch-up” limits (individuals age 50 or older) | 2011 | 2012 |
|---|
| 401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs2 | $5,500 | $5,500 |
| SIMPLE 401(k) plans and SIMPLE IRA plans | $2,500 | $2,500 |
| IRAs (traditional and Roth) | $1,000 | $1,000 |
2 Special catch-up limits may also apply to 403(b) and 457(b) plan participants.
Employer contribution/benefit 3 limits
| Defined benefit plan limits | 2011 | 2012 |
|---|
| Annual contribution limit per participant | No predetermined limit. Contributions based on amount needed to fund promised benefits | No predetermined limit. Contributions based on amount needed to fund promised benefits |
| Annual benefit limit per participant | Lesser of $195,000 or 100% of average compensation for highest three consecutive years | Lesser of $200,000 or 100% of average compensation for highest three consecutive years |
| Defined contribution plan limits (qualified plans, 403(b) plans, SEP, and SIMPLE plans) | 2011 | 2012 |
|---|
| Annual addition limit per participant (employer contributions; employee pretax, after-tax, and Roth contributions; and forfeitures) (does not apply to SIMPLE IRA plans) | Lesser of $49,000 or 100% (25% for SEP) of participant’s compensation | Lesser of $50,000 or 100% (25% for SEP) of participant’s compensation |
| Maximum tax-deductible employer contribution (not applicable to 403(b) plans) | 25% of total compensation of employees covered under the plan (20% if self employed) plus any employee pretax and Roth contributions; 100% for SIMPLE plans | 25% of total compensation of employees covered under the plan (20% if self employed) plus any employee pretax and Roth contributions; 100% for SIMPLE plans |
3 For self-employed individuals, compensation generally means earned income. This means that, for qualified plans, deductible contributions for a self-employed individual are limited to 20% of net earnings from self-employment (net profits minus self-employment tax deduction), and special rules apply in calculating the annual additions limit.
Compensation limits/thresholds
| Retirement plan compensation limits | 2011 | 2012 |
|---|
| Maximum compensation per participant that can be used to calculate tax-deductible employer contribution (qualified plans and SEPs) | $245,000 | $250,000 |
| Compensation threshold used to determine a highly-compensated employee | $110,000 (When 2011 is the look-back year) | $115,000 (When 2012 is the look-back year) |
| Compensation threshold used to determine a key employee in a top-heavy plan | $1 for more-than-5% owners $160,000 for officers $150,000 for more-than-1% owners | $1 for more-than-5% owners $165,000 for officers $150,000 for more-than-1% owners |
| Compensation threshold used to determine a qualifying employee under a SIMPLE plan | $5,000 | $5,000 |
| Compensation threshold used to determine a qualifying employee under a SEP plan | $550 | $550 |
| Traditional deductible IRA income limits–Income phase-out range for determining deductibility of traditional IRA contributions for taxpayers covered by an employer-sponsored plan and filing as: | 2011 | 2012 |
|---|
| Single | $56,000-$66,000 | $58,000-$68,000 |
| Married filing jointly | $90,000-$110,000 | $92,000-$112,000 |
| Married filing separately | $0-$10,000 | $0-$10,000 |
| Traditional deductible IRA income limits–Income phase-out range for determining deductibility of traditional IRA contributions for taxpayers not covered by an employer-sponsored retirement plan but filing a: | 2011 | 2012 |
|---|
| Joint return with a spouse who is covered by an employer-sponsored retirement plan | $169,000-$179,000 | $173,000-$183,000 |
| Roth IRA compensation limits–Income phase-out range for determining ability to fund Roth IRA for taxpayers filing as: | 2011 | 2012 |
|---|
| Single | $107,000-$122,000 | $110,000-$125,000 |
| Married filing jointly | $169,000-$179,000 | $173,000-$183,000 |
| Married filing separately | $0-$10,000 | $0-$10,000 |
This information, developed by an independent third party, has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indicative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.
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Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2011.
