November 1998 Vol.III, No.2

The Internal Revenue Service has announced the following 1999 dollar limits for qualified plans and other tax-favored retirement plans. The lull in the indexing of most of the limits is due to low inflation and the new laws enacted to slow the indexing.

 1998  1999
Maximum annual payout from a defined plan at the social security normal retirement age  $130,000  $130,000
Maximum annual contribution to an individual's defined contribution account  $30,000  $30,000
Maximum elective Section 401(k) and 403(b) deferrals  $10,000  $10,000
Maximum amount of annual compensation that can be taken into account for determining benefits or contributions under a qualified plan  $160,000  $160,000
Test to identify highly compensated employees  $80,000  $80,000

The Social Security Administration has announced the 1999 inflation-adjusted dollar tests and limits for Social Security benefits:

Wage Base: 1998  1999
 for Social Security Tax  $68,400  $72,600
 for medicare  No Limit  No Limit
Earnings Test (amount that can be earned before benefits are cut)  
Age 65-69 ($1 is withheld for every $3 in earnings over this amount)  $14,500/yr.  $15,500/yr.
Under Age 65 ($1 is withheld for every $2 in earnings over this amount)  $9,120/yr.  $9,600/yr.

This newsletter is provided for informational purposes only. It is not offered as or intended to constitute legal advice. Under the Rules of the Supreme Judicial Court of Massachusetts, this material may be considered advertising.

Marcia S. Wagner, Esq. & Associates, P.C. is pleased to announce that Marcia Wagner has recently authored a complete revision to The Bureau of National Affairs Tax Management Portfolio entitled "Plan Disqualification and ERISA Litigation"; published articles in the Villanova Law Journal and Journal of the American Bankers' Association; presented a paper to the American Bar Association at Stanford Law School; and conducted seminars for the Institute for International Research and the Conference of Consulting Actuaries.

Our firm is strongly committed to providing the highest quality legal advice and is dedicated to protecting the interests of our clients. In the event you desire legal advice, consultation or additional information, please contact Attorney Marcia S. Wagner.