What is the maximum annual salary deferral the IRS allows?

Answer 1

I assume you are referring to retirement plans.

For a 401k or 403b plan, the maximum contribution for 2007 is $15,500 (plus $5,000 if you are age 50 or older).

For a SIMPLE, the maximum is $10,500 (plus $2,500 if you are age 50 or older).

If your income is below the threshold, you can also contribute up to $4,000 (plus $1,000 if you are age 50 or older) to a traditional IRA, and reduce your income from wages, hence defer taxes on them.

If your employer also offers a 457b plan, you can defer up to an additional $15,500 (plus $5,000 if you are age 50 or older).

Note that your employer's plan may have restrictions, plus the cap on contributions to 401k, 403b, 457b does depend on your income as well, which may lower the maximum amounts available to you.

Answer 2

It depends on whether you are an employee or an employer and whether you are really asking about how much you can sock away in retirement or pension plans or how much just as an employee.

As an employee, the question has been answered above.

But if you qualify for an SEP, you may be able to put away more than $42K a year, although some of the money is considered "profit sharing" rather than pure deferral.

In addition, if you have a 512(i) plan, which refers to a certain type of defined benefit plan, you may be able to sock away $100K or more a year (no known cap) if you meet the terms of the plan.

Answer 3

If you are referring to a deferred comp plan (unqualified), and not to a qualified retirement plan, the limit is pretty high if there is one at all. When I was in a deferred comp plan, I was never told of a limit, and know that six-figure bonuses were allowed to be deferred totally. There might have been a limit on salary, but if there was, it was something like 50%.

Ask your HR department or plan administrator.