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IRS Announces New Solo 401K Plan Contribution Limits for 2012

For 2011, an individual under the age of 50 years old is eligible to make a maximum contribution into a solo 401K plan in the amount of $49,000. The amount is increased to $54,500 in the case of an individual over the age of 50.

In 2012, the maximum solo 401(k) plan contribution limitation will increase to $50,000 and $55,500 for plan participants over the age of 50.

Under the 2012 new Solo 401k) contribution rules, a plan participant under the age of 50 can make a maximum employee deferral contribution in the amount of $17,000. That amount can be made in pre-tax or after-tax (Roth). On the profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined maximum, including the employee deferral, of $50,000, an increase of $1,000 from 2011.

For plan participants over the age of 50, an individual can make a maximum employee deferral contribution in the amount of $22,500. That amount can be made in pre-tax or after-tax (Roth). On the profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined maximum, including the employee deferral, of $55,500, an increase of $1,000 from 2011.

For more information on the new Solo 401k plan contribution rules, please contact a 401(k) Expert at 800-472-0646 or visit www.irafinancialgroup.com.

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Posted in Solo 401(k)

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