Changes, Changes, Changes. Things are always changing in the tax law. Here are the just-announced 2017 Retirement Plan Contribution Limits:
- 401(k) deferrals are unchanged at $18,000
- 401(k) catch-up if age 50 or older is unchanged at $6,000
- The annual contribution limit for defined contribution plans increased from $53,000 to $54,000 ( that means for a 50+ year old in a 401(k) plan, the maximum could be $60,000 with the catch-up)
- The annual compensation limit increased from $265,000 to $270,000
- The compensation threshold for highly compensated definition is unchanged at $120,000
In addition, Social Security Administration announced a significant increase in the taxable wage base from $118,500 to $127,200
This last change is significant as it affects wage earners and business owners whether they operate sole-proprietors, s-corporation owners, or with a different entity.