Pension Plan Contributions

The most popular Pension plans for small business owners are 401(k) plans, simple 401(k) plans and simple IRA plans.

All pension contributions are based on earned income (income subject to social security and medicare taxes).

Contribution Limits for 2018

  Payroll Deduction Catch-Up Company
401(k), 403(b), 457 $18,500 $6,000 25% of salary
Simple 401(k) $12,500 $3,000 3% match 2% for all
Simple IRA $12,500 $3,000 3% match 2% for all

Contributions are allowed past age 70.5 for Roth IRA

  Regular Catch-Up
Roth IRA $5,500 $1,000
Roth Phase Out Ranges
Single $120,000 $135,000
Married $189,000 $199,000

Contributions NOT allowed past age 70.5 for IRA

  Regular Catch-Up
IRA $5500 $1,000
Filing Status Full Deduction Phase-Out No Deduction
Traditional IRA if covered by a Plan at Work
Single, Head of Household $63,000 or less $63,000-$73,000 $73,000 or more
Married Filing Jointly $101,000 or less $101,000-$121,000 $121,000 or more
Married Filing Seperately   less than $10,000 $10,000 or more
Traditional IRA if Not covered by Plan at Work
Single, Head of Household No Limit No Limit No Limit
Married Filing Jointly (Spouse not Covered) No Limit No Limit No Limit
Married Filing Jointly (Spouse Covered) $189,000 or less $189,000-$199,000 $199,000 or more
Married Filing Seperately (Spouse Covered)   less than $10,000 $10,000 or more
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