Posted on April 20, 2005 at 16:48:57:
Workers can stash more into their retirement funds this year. For 401(k), 403(b), and 457 plans, the contribution cap has risen to $14,000 in 2005. Those born before 1956 can add another $4,000.
In SIMPLE plans, usually the self-employed and those in small businesses, the pay-in limit has risen to $10,000, or $12,000 for those born before 1956.
IRS deductions are larger, too. For 2005, contributions go up to $4,000 for the individual and the same for a spouse, with a $500 bonus for those born before 1956. Also increased: the income level at which deductions are phased out for taxpayer who are also in company retirement plans. The phaseout starts at $70,000 of adjusted gross income for couples and rises to $80,000. For singles, the phaseout starts at $50,000 and goes to $60,000. If AGI is less than $150,000, a deduction can still be taken on a contribution for a spouse who is not in the company plan.