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Frank DiPaola,
EA
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Tax Accountant |
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Pension and IRA
Modifications
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The new tax
law makes extensive changes to the rules relating to individual retirement
arrangements (IRA's) and qualified retirement plans. Among the changes
included in the tax act are: |
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Increased
contribution limits to Traditional and Roth IRA's (see Table 1 below),
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Catch-up
contributions to IRAs for taxpayers who are age 50 or older (see Table 2
below);
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Provisions
for expanding coverage, including increased contribution and benefit
limits for qualified retirement plans, increases in elective deferral limits (see
Table 3 below), and a credit for certain elective deferrals and IRA
contributions;
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Table 1 - Traditional
& Roth IRA Contributions |
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Tax Year |
Contribution Limit |
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2001 |
$2000 |
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2002 - 2004 |
$3000 |
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2005 - 2007 |
$4000 |
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2008 and Later |
$5000 |
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Table 2 - Catch-Up
Contributions to Traditional & Roth IRA's |
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Tax Year |
Catch-Up Contribution
Limit |
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2002 - 2005 |
$500 |
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2006 and Later |
$1000 |
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Table 3 - Elective Deferrals to Qualified Retirement Plans |
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Tax Year |
401(k), 403(b) 457 & SARSEP
Contribution Limit |
SIMPLE 401(k) and SIMPLE
IRA Contribution
Limit |
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2001 |
$10,500 |
$6,000 |
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2002 |
$11,000 |
$7,000 |
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2003 |
$12,000 |
$8,000 |
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2004 |
$13,000 |
$9,000 |
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2005 |
$14,000 |
$10,000 |
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2006 |
$15,000 |
$10,000 |
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Click here to return to "Economic Growth & Tax Relief Reconciliation
Act of 2001" |
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