Wednesday, November 26, 2008


IRS publishes inflation adjustments each year on personal exemptions, deductions, and contribution limits. Here are some for 2009.

$13,000 annual gift tax exclusion per individual per recipient (up from 12K in 2008).

$3,500,000 estate tax exemption equivalent per individual (up from 2 mil).

$1,000,000 gift tax exemption equivalent per individual (unchanged)

$5000 IRA and Roth IRA with $000 catch-up for individuals 50 and older (unchanged).

$49,000 or 100% of income (which ever is less) Sec. 415 limit for defined contribution plans (up from $46K) and for profit-sharing plans. Individuals 50 and older at the end of 2009 may increase their maximum to $54,500 if theu elect to increase their elective deferral by the available $5,5000 catch-up provision.

$49,000 or 25% of income (whicheveris less) for SEP plans. Owners of Pass-through entities may be limted to 20% of income.

$16,5000 elective deferral limit for 401(k), 403(b) and certain 457 plans ( up from $15,500) with catch-up provisions for those 50 and older.

$245,000 individual compensation limit for calculating pension and profit-sharing plan contribution limits (up from $230K).

$11,500 SIMPLE plan contribution limit (up from $10,500)

$195,000 or 100% (whichever is less annual benefit limit for defined benefit and Section 403(b) fully insured pension plans.

$106,800 Social Security wage base (up from $102,000)

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