Advanced Underwriting Consultants

Question of the Day – April 9

Ask the Experts!

The professionals at Advanced Underwriting Consultants (AUC) answer the tax questions posed by producers.  Here’s the question of the day.

Question:  My client turns 50 in December.  Is she eligible to make a catch-up contribution to her Section 403(b) plan this year?

Answer:  Yes.

Here’s an excerpt from the IRS website that confirms the age 50 catch-up contribution is available in the year the participant turns 50.

If permitted by the 403(b) plan, participants who are age 50 or over at the end of the calendar year can also make Catch-up employee elective contributions of $5,500 in 2012 and 2013 beyond the basic limit on elective deferrals.

The catch-up contribution is an additional deferral in excess of the 2013 maximum elective deferral of $17,500 available to younger participants.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day. 

Question of the Day – April 20

Ask the Experts!

The professionals at Advanced Underwriting Consultants (AUC) answer the tax and technical questions posed by producers.  Here’s the question of the day.

Question: I have a highly compensated client who works for a government agency.  She participates in a thrift savings plan and a Section 403b plan.  What is the maximum amount that can be put in those plans in 2012?

Answer: Both those plans are considered to be defined contribution plans for the purpose of the tax code, so the limits must be coordinated.

The maximum combined elective deferrals that can be made to the 403b and TSP are $17,000 for 2012—or $22,000 if age 50 or older.  The maximum combined overall limit for combined employer and employee contributions to the 403b and TSP for 2012 is $50,000.

Have a question for the professionals at AUC?  Feel welcome to submit it by email.  We may post your question and the answer as the question of the day.