IRA and SSA Release 2012 Inflation Adjustments
Many tax-related limitations and thresholds change on a periodic basis due to cost of living. Toward the end of each year, the IRS releases lists of the new amounts that will be applicable for the upcoming year. Two such IRS News Releases were issued a few days ago, and the links below provide updated 2012 amounts that may be of interest to you.
News Release IR-2011-103 addresses Individual Retirement Account (IRA) and qualified retirement plan limits, including contribution caps and various income-related limits and phase-out thresholds. That release is found here:
Of note, the defined contribution limitation amounts will be increased for the first time since the beginning of 2009, as follows:
- The overall limit for contributions to defined contribution plans (exclusive of the age 50 catch-up amount of $5,500 for elective deferrals) will go from $49,000 to $50,000.
- The compensation limit for calculating plan contributions will go from $245,000 to $250,000.
- The basic 401(k) and 403(b) elective deferral amount will go from $16,500 to $17,000.
News Release IR-2011-104 addresses various items such as the standard deduction, personal exemptions, income phase-out levels for education credits, annual gift exclusions and many more. That release is found here:
In addition to the above, the Social Security Administration has announced that the FICA taxable wage base for 2012 will be $110,100. For 2009 through 2011, it has been $106,800.
If you have any questions regarding how these changes or the underlying limits and benefits impact you, do not hesitate to give us a call at 800-244-7444.
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Pursuant to requirements imposed by the Internal Revenue Service, any tax advice contained in this communication (including any attachments) is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter. Please contact us if you wish to have formal written advice on this matter.