Contribution limits:
Roth IRAs and traditional IRAs 2007: $ 4,000
2008: $ 5,000

Roth IRA Basics:
- Contributions are made with after-tax dollars
- Contributions are not deductible
- Can contribute even after the age of 70 -1/2

- Money can stay in a Roth IRA for your lifetime
- No tax penalty if you withdraw early
- Qualified distributions are tax free
- No income restrictions
- No income tax on withdrawals during retirement
Roth IRA income limits increase in 2007:
-Single people: A full contribution is allowed if income is $99,000 or less. A partial contribution is allowed if income is up to $114,000.
-Married couples: Contribution limits range from $156,000 to $166,000.
-To convert from a traditional to a Roth IRA, income cannot exceed $100,000, regardless of marital status.

Catch-up contributions:
Individuals age 50 and older can make “catch-up” contributions to their retirement plans.
-Regular IRAs: Limits for 2007: $5,000; Limits for 2008: $6,000
-SEP IRAs, 401K, 403(b) and 457 plans: Limits for 2007: $5,000
-SIMPLE plans: Catch-up contributions equal 50% of whatever the current limit is for 401k, SEP, and 457 plans.

Qualified retirement plans: The current contribution limit allowed to be considered when determining contribution amounts and benefits is $250,000.

Defined benefit plans:
-2007 cap on annual benefits is the lesser of $180,000 or 100% of the average compensation for the last three years.
-Annual additions are limited to the lesser of $45,000 or 100% of compensation.

401K, SEP, 403 B, Elective Deferrals:
The 2007 limit is $15,500 for elective deferrals for 401k plans, tax sheltered annuities, and salary deduction simplified employee pension plans.

Annual elective deferrals to a SIMPLE plan: The 2007 limit is $10,500.

Annual deferrals under section 457 plans (such as deferred compensation plans or state or local governments or tax-exempt organizations): The 2007 limit is $15,500.

Federal estate tax law amounts–For many people over age 50, the home is the largest asset in their estate. The amount in an estate that is excluded from Federal Estate Tax is $2 million for 2007 and 2008. The exclusion rises to $3.5 million for 2009.

Gift tax–An individual can make a gift of up to $12,000 to any other individual without paying a gift tax or reporting the gift. Just a reminder: The tax on gifts over $12,000 is paid by the donor–the person giving the gift.

Capital Gains Tax–In 2007 and 2998, the maximum tax percentage is 15% on long-term (over a year) capital gains (sales price minus basis, which varies based on the circumstances). On December 31, 2008, that maximum rises to 20%. The minimum tax percentage fluctuates. It is 5% in 2007, dips to a zero minimum (0%) in 2008 and then goes up to 10% on December 31, 2008. In 2007, the capital gains tax exemption amounts remain the same: $250,000 is not subject to tax for an individual, and for couples, the figure is $500,000.�