SEP’s, SIMPLE’s, and Qualified Plans

The limits for contributions to all types of retirement plans have increased, both for employees and for self-employed taxpayers.

The limit for 401k, 403b, 457, and SEP contributions increases to $14,000 for 2005 (up from $13,000 for 2004). The limit for SIMPLE plans increased to $10,000, up from $9,000.

A taxpayer over the age of 50 at the end of 2005 may contribute and additional $4,000 catch-up contribution to his 401k. 403b, or SEP, or an additional $2,000 to his SIMPLE plan. These figures are up from $3,000 and $1500, respectively.

Individual Retirement Plans (IRA’s)

The Contribution limits for Roth IRA’s and Traditional IRA’s have increased for 2005. The regular contribution limit for both types of IRA’s increased to $4,000 from $3,000 for 2004. The catch-up contribution remains $500 for individuals age 50 and over.

2005 Income Tax - Who has to File?

Every year there are changes to the tax laws. The first question to affect any tax return is, "Do I have to file a return?"

For most taxpayers, a tax return must be filed if their gross income exceeds their standard deduction amount plus their personal exemption amount. The gross income filing requirements for 2005 have changed and are shown below.

Gross Filing Requirements for 2005

Single

Under age 65 ---------------------------- $8,200
Age 65 or over --------------------------- $9,450

Married Filing Jointly

Both under age 65 ---------------------- $16,400
One age 65 or over --------------------- $17,400
Both age 65 or over -------------------- $18,400

Maried Filing Separately

Regardless of age ----------------------- $3,200

Head of Household

Under age 65 ---------------------------- $10,750
Age 65 or over --------------------------- $11,750

Qualifying Widow(er)

Under age 65 ---------------------------- $13,200
Age 65 or over --------------------------- $14,200