The IRS (Internal Revenue Service)
announced on October 18th, 2006 the cost of living adjustments
to pension and 401k retirement plans for the upcoming
tax year of 2007. These adjustments are carried out by
the Commisioner under Section 415 of the Internal Revenue
Code. The 401k max contributions for the tax year 2007
and previous years is detailed below:
Note: The max 401k contribution for the
year 2007 is $15,500 which is up $500 from the year 2006.
| |
2007 |
2006 |
2005 |
2004 |
2003 |
2002 |
| Max 401k Contributions |
$15,500 |
$15,000 |
$14,000 |
$13,000 |
$12,000 |
$11,000 |
| Defined Annual Contribution Limits |
$45,000 |
$44,000 |
$42,000 |
$41,000 |
$40,000 |
$40,000 |
| Maximum Allowable Annual Compensation |
$225,000 |
$220,000 |
$210,000 |
$205,000 |
$200,000 |
$200,000 |
| 401K Catch Up Contributions |
$5000 |
$5000 |
$4000 |
$3000 |
$2000 |
$1000 |
| |
2007 |
2006 |
2005 |
2004 |
2003 |
2002 |
| 403b Plans / 457 Plans |
$15,500 |
$15,000 |
$14,000 |
$13,000 |
$12,000 |
$11,000 |
| Simple Employee Deferral |
$10,500 |
$10,000 |
$10,000 |
$9,000 |
$8,000 |
$7,000 |
| Simple Catch-Up Deferral |
$2,500 |
$2,500 |
$2,000 |
$1,500 |
$1,000 |
$500 |
| SEP Minimum Compensation |
$500 |
$450 |
$450 |
$450 |
$450 |
$450 |
| Maximum Allowable SEP Compensation |
$225,000 |
$220,000 |
$210,000 |
$205,000 |
$200,000 |
$200,000 |
- Under Section 415(c)(1)(A), the
Maximum Defined Annual Contribution Limits has been increased
from $44,000 in 2006 to $45,000 in 2007.
- Under Section 402(g)(1) and Section
402(g)(3), the maximum contribution limits for 403b plans
and 457 plans is $15,500 in 2007, up from $15000 in 2006.
- Under Section 401(a)(17), 404(l),
408(k)(3)(C), and 408(k)(6)(D)(ii), the maximum allowable
compensation limit is increased from $220,000 in 2006
to $225,000 in 2007.
- The Catch Up 401k Contributions
for retirement savers over the age of 50 still remains
at $5000 in 2007, under Section 414(v)(2)(B)(i).
- The Simple Catch Up Deferrals remains
at $2500 in 2007, under Section 414(v)(2)(B)(ii).
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