Connect with us

New 2012 Pension Plans Dollar Limitation



Cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for Tax Year 2012 has just been announced by the IRS on Thursday (October 20’ 2011).

In general, many of the pension plan limitations will change for 2012 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment. Other limitations will remain unchanged.


Highlights include:

1. Elective Deferral Limit – The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $16,500 to $17,000.

2. Catch-up Contribution Limit – The catch-up contribution limit for those aged 50 and over remains unchanged at $5,500.

3. Deduction for Taxpayers and Adjusted Gross Incomes (AGI) for IRA – The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $58,000 and $68,000, up from $56,000 and $66,000 in 2011. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $92,000 to $112,000, up from $90,000 to $110,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $173,000 and $183,000, up from $169,000 and $179,000.

4. Adjusted Gross Incomes (AGI) for Roth IRA – The AGI phase-out range for taxpayers making contributions to a Roth IRA is $173,000 to $183,000 for married couples filing jointly, up from $169,000 to $179,000 in 2011. For singles and heads of household, the income phase-out range is $110,000 to $125,000, up from $107,000 to $122,000. For a married individual filing a separate return who is covered by a retirement plan at work, the phase-out range remains $0 to $10,000.

5. AGI for Saver’s Credit of Low-and-Moderate-Income – The AGI limit for the saver’s credit (also known as the retirement savings contributions credit) for low-and moderate-income workers is $57,500 for married couples filing jointly, up from $56,500 in 2011; $43,125 for heads of household, up from $42,375; and $28,750 for married individuals filing separately and for singles, up from $28,250.

For further details, you can read it []

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Are you looking for easy accounting tutorial? Established since 2007, hosts more than 1300 articles (still growing), and has helped millions accounting student, teacher, junior accountants and small business owners, worldwide.


Related pages

periodic inventory system income statementsales price variance formulahow to calculate break even sales in dollarspercentage of completion method of accountingwhere to find marketable securities on balance sheetmeaning of embezzlingrate volume variance analysiscpa exam adviceoperating lease accounting lessorgross method perpetual inventory systemcalculate interest expense on loanrevaluation surplus definitioncashmodelscash book reconciliation examplepresent value of minimum lease paymentsunder ifrs the term provisioncpa exam ntsdepreciation reducing balance formulafinancial questionnaire templatecapital account journal entrybreak even managerial accountinghow to calculate profit margin in accountingaccounting for derivative instruments and hedging activitiesbad debts and allowance for doubtful accountsjournal adjusting entriessummary of unadjusted differencesaccounting acronymshow to calculate depreciation expenseaverage rocecash basis and accrual basis examplescalculate depreciation using straight line methodtax audit engagement letter sampleaccounting closing entries processcalculation of deferred tax on depreciationdifference between roi and roeformat for bank reconciliation statementfuture contracts exampleis prepaid insurance a current assetbecoming a certified accountantretail flashinggaap book valueincrease in stockholders equityerp examplessales revenue minus cost of goods soldwhich forecasting method to usepurchase returns and allowances journal entryhow the cpa exam is scoredhorizontal and vertical analysis of balance sheetwages expense journal entrywhat is the hardest section of the cpa examcash based accounting examplewhat is throughput costingtax audit engagement lettercontingent liability us gaapdefine monetary transactionssample format of promissory noteirs reasonable cause examplesdiscontinued operations ifrs 5tax return scenariosex works revenue recognitionjob costing systems accumulate the costs for each individual jobeconomic order quantity formula examplecapitalize property taxesdefine debit and credit in accountinghow to calculate ebit examplereverse accrualtreasury stock journal entriesaccounts aptitude questions and answersledgers furnitureinflation and capital budgetingtax audit definition wikipediacurrent assets minus current liabilities