2012 Contribution Limits

• The Social Security Wage Base for 2012, beginning January 1, 2012 will increase for the first time in several years. The wage base increases from $106,800 to $110,100.
• The maximum annual amount an employee can contribute to a 401(k) Plan during 2012 increases to $17,000. Employees age 50 and above can contribute an additional “catch-up” contribution of $5,500, for a total maximum contribution of $22,500.
• The maximum annual amount an employee can contribute to a traditional IRA or a Roth IRA in 2012 is $5,000; employees age 50 and above can contribute up to $6,000.
• Simple IRA’s have a maximum annual contribution of $11,500 for employees in 2012; employees age 50 and above can contribute up to $14,000.
• Colorado’s Minimum Wage increases from $7.36 per hour to $7.64 per hour, effective January 1, 2012. The Tipped Employee’s Minimum Wage increases to $4.62 per hour, also effective January 1, 2012.
• The 2012 IRS standard mileage rate has not been announced. Please note that the 2011 IRS standard mileage rate changed at mid-year. From January 1, 2011 to June 30, 2011 the rates were: $0.51 cents per mile for business miles driven; $0.19 cents per mile for medical or moving purposes; and $0.14 cents per miles driven in service of charitable organizations. Effective July 1, 2011 the business mileage rate increased to $0.555 cents per mile; medical rate increased to $0.215 per mile, and the charitable rate remained unchanged at $0.14 per mile.