Adjusted Limits
The Internal Revenue Service has announced the 2008 adjusted limits that affect the operation of tax-qualified retirement plans, including 401(k) plans, and certain other types of employee benefit plans. Please see the table below for these new adjusted limits, effective January 1, 2008.
Social Security
The Social Security (OASDI) taxable wage base, which governs the amount of pay subject to Social Security tax withholding and affects plans that are "integrated" with Social Security, also is adjusted annually. For 2008, the wage base has been increased to $102,000. The Medicare tax, however, applies to all wages without limit.
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2008 ADJUSTED LIMITS |
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Earning (in previous year) more than |
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All plans other than SIMPLE Plans SIMPLE Plans |
$2,500 |
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Maximum account balance subject to five-year distribution period Each dollar amount of account balance in excess of $915,000 that adds one year to distribution period |
$185,000 |
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Contributions must be made for employees earning at least |
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.