2006 Pension Plan
Limitations Announced
Courtesy of The Mellems
IRS has released New Release IR 2006-120 which contains the cost of
living adjustments for the dollar limitations on benefits and contributions
under various qualified pension plans for 2006. Below are some of the
more common amounts.
The defined benefit plan limitation increases from $170,000 in 2005
to $175,000 for 2006. The defined contribution plan maximum increases
from $42,000 to $44,000.
The annual compensation limit increases from $210,000 to $220,000.
A year of service for SEP coverage stays at $450 of earnings.
Prior law changes that are effective for 2006 include:
Elective Deferrals from $14,000 to $15,000, with catch-up increasing
from $4,000 to $5,000.
Deferrals to SIMPLE remain at $10,000, with catch-up increasing from
$2,000 to $2,500.
The release also has the other pension related indexed amounts such
as key employee, top heavy, and control
employee limits.
A copy of this news release can be found HERE.
This text has been shared with you courtesy of: David & Mary Mellem,
EAs & Ashwaubenon Tax Professionals, 920-496-1065 (fax 920-496-9111)
davidmellem@yahoo.com, marymellemea@yahoo.com
Copyright 2005 Ashwaubenon Tax Professionals. No reproduction of this
article is permitted without the express consent of Ashwaubenon Tax Professionals,
2140 Holmgren Way, Suite 1040, Green Bay, WI 54304
