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left arrowPrevious Page: Publication 571 - Tax-Sheltered Annuity Programs for Employees of Public Schools and Certain Tax-Exempt Organizations - 15-Year Rule
right arrowNext Page: Publication 571 - Tax-Sheltered Annuity Programs for Employees of Public Schools and Certain Tax-Exempt Organizations - Ministers and Church Employees
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taxmap/pubs/p571-013.htm#TXMP5b974975
Figuring the Limit on Elective Deferrals(p9)


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left link arrow Limit on Elective Deferrals right link arrow

You can use Part II of Worksheet 1 in chapter 9 to figure the limit on elective deferrals.


taxmap/pubs/p571-013.htm#TXMP2950bd5e
Example(p9)


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Floyd has figured his limit on annual additions. The only other component needed before he can determine his MAC for 2008 is his limit on elective deferrals.


taxmap/pubs/p571-013.htm#TXMP05242fb8
Figuring Floyd's limit on elective deferrals.(p10)


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Floyd has been employed with his current employer for less than 15 years. He is not eligible for the special 15-year increase. Therefore, his limit on elective deferrals for 2008 is $15,500, as shown in Table 4-2.

Floyd's employer will not make any nonelective contributions to his 403(b) account and Floyd will not make any after-tax contributions. Additionally, Floyd's employer does not offer a Roth contribution program.


taxmap/pubs/p571-013.htm#TXMP5472d5f9
Figuring Floyd's MAC(p10)


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Floyd has determined that his limit on annual additions for 2008 is $46,000 and his limit on elective deferrals is $15,500. Because elective deferrals are the only contributions made to Floyd's account, the maximum amount that can be contributed to a 403(b) account on Floyd's behalf in 2008 is $15,500, the lesser of both limits.

Table 4-2. Worksheet 1. Maximum Amount Contributable (MAC)

Note. Use this worksheet to figure your MAC.

Part I. Limit on Annual Additions    
1. Enter your includible compensation for your most recent year of service 1. $70,475
2. Maximum
  • For 2007, enter $45,000
  • For 2008, enter $46,000
 2. 46,000
3. Enter the lesser of line 1 or line 2. This is your limit on annual additions 3. 46,000
  Caution: If you had only nonelective contributions, skip Part II and enter the amount from line 3 on line 18.    
Part II. Limit on Elective Deferrals    
4. Maximum contribution
  • For 2007 enter $15,500
  • For 2008 enter $15,500
 4. 15,500
  Note. If you have at least 15 years of service with a qualifying organization, complete lines 5 through 17. If not, enter zero (-0-) on line 16 and go to line 17.    
5. Amount per year of service 5. 5,000
6. Enter your years of service 6.             
7. Multiply line 5 by line 6 7.             
8. Enter the total of all elective deferrals for prior years made for you by qualifying organizations 8.             
9. Subtract line 8 from line 7. If zero or less, enter zero (-0-) 9.             
10. Maximum increase in limit for long service 10. 15,000
11. Enter all prior year increases in the limit for long service 11.             
12. Enter the total amount of all designated Roth contributions for prior years 12.             
13. Add lines 11 and 12 13.             
14. Subtract line 13 from line 10 14.             
15. Maximum additional contributions 15. 3,000
16. Enter the least of lines 9, 14, or 15. This is your increase in the limit for long service 16. -0-
17. Add lines 4 and 16. This is your limit on elective deferrals 17. 15,500
  Part III. Maximum Amount Contributable    
18.
  • If you had only nonelective contributions, enter the amount from line 3. This is your MAC.

  • If you had only elective deferrals, enter the lesser of lines 3 or 17. This is your MAC.

  • If you had both elective deferrals and nonelective contributions, enter the amount from line 3. This is your MAC. (Use the amount on line 17 to determine if you have excess elective deferrals as explained in chapter 7.)
18. $15,500

left arrowPrevious Page:  Publication 571 - Tax-Sheltered Annuity Programs for Employees of Public Schools and Certain Tax-Exempt Organizations - 15-Year Rule
right arrowNext Page:  Publication 571 - Tax-Sheltered Annuity Programs for Employees of Public Schools and Certain Tax-Exempt Organizations - Ministers and Church Employees
Use  left arrowright arrow to find additional occurrences of topic items. Index for this Publication