The IRS today announced changes to the maximum dollar contribution limits for various retirement savings plans for the 2012 tax year. Among the biggest changes is an increase in the annual contribution limit from $16,500 to $17,000 for employees who participate in 401(k), 403(b), most 457 plans, and the federal Thrift Savings Plan.
The IRS today also issued Revenue Procedure 2011-52, which sets the dollar values of various items in the tax code that are inflation adjusted for 2012, including the standard deduction.
The significance of this revenue procedures is that the employee deferral contributions limits for solo 401K plan participants will be increased to $17,000 for 2012. This adjustment will make the Solo 401K plan even more attractive for the self-employed or small business owner with no employees.