| theworkplace.biz New IRS Limits for 2009 George L. Chimento October 16, 2008 Many of the benefit plan limits in the Internal Revenue Code are adjusted each year, either according to a specific statutory amount or according to an inflation index. Following are important adjustments for 2009 compared with 2008: 2009 2008 SS Taxable wage base $106,800 $102,000 Defined contribution limit $49,000 $46,000 Defined benefit limit $195,000 $185,000 Maximum compensation $245,000 $230,000 Individual deferral limit $16,500 $15,500 Catch-up deferral limit $5,500 $5,000 Highly compensated employee* $110,000 $105,000 * A person is deemed to be a "highly compensated employee" based on the prior year’s compensation. The $110,000 amount will be used to determine if a person is a highly compensated employee in 2010. For 2009 determinations, a person will generally be considered to be a highly compensated employee if he (or she) earned at last $105,000 in 2008. Persons who own more than 5% of a business in the current or previous year are also highly compensated employees, regardless of compensation. A helpful table with the historical progression of these limits, and other limits, can be found at this link: IRS table with all limits This article is provided as a courtesy and may not be relied upon as legal advice, or to avoid taxes and penalties. Distribution to promote, market, or recommend any arrangement or investment to avoid or evade taxes, including penalties, is expressly forbidden. Any communication with the author as to its contents, does not, of itself, create a lawyer-client relationship. Under the ethical rules applicable to lawyers in some jurisdictions, this may be considered advertising. |
