On Oct 20, 2011 IRS announced pension plan changes for 2012. The changes are due to increase in cost of living index. Following are the changes:
- Employees that participate in 401(K), 403(b), and most of the 457 plans, as well as Thrift Savings Plan can now contribute $17,000 an increase from $16,500 for 2011.
- However, this change does not affect the catch up contribution for those who are 50 and over. That contribution still remains at $5000.
- The tax payers that are making contribution to a traditional IRA the deduction is phased out for singles and head of household who are covered by a workplace retirement plan and have AGI between $58K and $68K, this is up from $56K and $66 for 2011.For married couple filing joint the phase out range is $92K to $112K, up from $90K to $110K
- However people that are making the contribution to Roth IRA the new phase out range is from $110K to $125 (Filing single), up from $107K to $122K. Taxpayers that are married filing joint the contribution is $173K to $183, up from $169K to $179.
- The retirement savings contribution credit for low income to moderate income workers has increased from $56,500 in 2011 to $57,500 in 2012. For head of household the contribution is now $43,125, up from $42,375. If you are a married person filing individually the new contribution is $28,750, up from $28, 250.
For detailed information please visit: http://www.irs.gov/newsroom/article/0,,id=248482,00.html
