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When:
January 01, 2001

Who it Affects:
For taxpayers contributing to retirement plans at work.

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2001 Tax Law Changes
401(k) and related contribution limits hold steady

In 2001, you could contribute as much as $10,500 to your 401(k) account and exclude the amount from your income. Thats the same as your contribution limit for 2000.

In 2002, you can contribute as much as $11,000. The limit rises by $1,000 a year until 2006 when it hits $15,000.

401(k) accounts are funded generally by payroll deductions at your workplace.

Here are the limits for other plans:

457 Plans: The limit for 457 plans, used by state and local government employees, jumps to $8,500 in 2001 from $8,000 in 2000.

SIMPLE Plans: The limit for SIMPLE retirement accounts, offered by smaller employers, will increase to $6,500 in 2001 from $6,000 in 2000.

Self-Employed Plans: The contribution limit for self-employed Keogh plans jumps to $35,000 in 2001 from $30,000 in 2000. But the maximum contribution that self-employed workers can make to a Simplified Employee Pension (SEP) plan remains unchanged at $25,500.Your contributions to these retirement plans are also limited by a percentage of your income. The percentage varies by plan.
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