By Debbie Herbert, CPA, Director at Blue & Co.
On an annual basis, the Internal Revenue Service (IRS) releases plan contribution and benefit limitations, as well as income eligibility thresholds, all of which typically reflect cost of living adjustments and other tax law changes. As plan auditors, we pay close attention to these limits during our planning and performance of an audit, as a Plan’s adherence to such IRS limits is important in maintaining its tax qualified status.
Included in the table below is a summary of limits that may be applicable to your plan. These limits include contribution limits applicable for various plans and other retirement accounts, as well as income thresholds for purposes of eligibility for contribution and for nondiscrimination testing.
Understanding IRS limits is critical to employers not only for purposes of nondiscrimination testing and compliance with tax laws, but also because changes in limits may affect annual budgeting based upon consideration of any employer contributions to a plan. For employees and plan participants, these limits are also of special interest, as employees may seek to maximize retirement savings and utilize applicable tax credits.
For questions concerning how these limits impact your plan, your tax advisor and plan advisor are great resources, as well as your plan auditors. Please reach out to us with any questions!
Debbie Herbert
Director
Phone/fax: 812-405-1733
Email: dherbert@blueandco.com
