401k Limit for Self Employment Tax

Video Transcript

Hi, I’m Tom Choisent, enrolled agent; I get asked quiet frequently, what are my limits on my IRA’s and 401K’s and several plans? So I took a little moment to jot them down and set them aside to cover in one of the segments here on these clips. So for thousand and seven you can defer up to fifteen five, fifteen thousand five hundred dollars that is accumulative of all plans for each individual so kind of watch that one. If you are over fifty you can add another five thousand dollars to that which brings it up to twenty thousand five hundred dollars of your income that you can defer. Now the regular IRA for 2007 is still four thousand dollars and if you are over fifty you get the extra thousand so it is five thousand dollars for folks over fifty. These same limits apply for Roth IRAs and I like Roth IRAs because it is in those years where you don’t really need the IRA deduction, you might have some other breaks in your taxes, those are good years to put into the Roth IRA because should you need some emergency funds in the future you won’t get premature distribution penalties over the principal part out of them. So I have to, I’m sorry, I hope this helps you get current on how much you can defer and what you can do because you can put into your IRA through April 15th of the current filing period.

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