2009 Contribution & Benefit Limits  The maximum annual compensation limit increases from $230,000 to $245,000. The compensation limitation used in the definition of highly compensated employee increases from $105,000 to $110,000. The maximum allocation limit for a defined contribution plan (profit sharing & 401(k)) increases from $46,000 to $49,000 for plan years that end in 2009. The limitation on the annual benefit under a defined benefit plan increases from $185,000 to $195,000.   The 401(k) calendar year dollar limitation increases from $15,500 to $16,500.   The calendar year dollar limitation for catch-up contributions to a 401(k) plan increases from $5,000 to $5,500 for individuals who are at least age 50 by December 31, 2009.   *The dollar limits noted above apply for plan years that begin in 2009, except as noted. Other Important 2009 Limits The Social Security Wage Base was also increased for 2009 from $102,000 to $106,800. IRA contribution limits remained unchanged at $5,000.  The limit for any taxpayer aged 50 or older by December 31, 2009 remains at $1,000.

IRS Required Statement: This document was not intended or written to be used, and it cannot be used by the recipient, for the purpose of avoiding penalties that may be imposed on any taxpayer.