Publication 553 - Highlights Of 2003 Tax Changes - Department Of The Treasury Page 15
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You did not make an election not to claim the special
Deemed IRAs
allowance.
For plan years beginning after 2002, a qualified plan (de-
fined later) can maintain a separate account or annuity
If you have not filed your tax return for the first tax year
under the plan to receive voluntary employee contribu-
following your tax year that included September 11, 2001,
tions. If the separate account or annuity otherwise meets
and you owned the property as of the first day of that tax
the requirements of a traditional IRA or Roth IRA, it is
year, file Form 3115, Application for Change in Accounting
deemed a traditional IRA or Roth IRA. A deemed IRA is
Method, with your timely filed tax return for that year.
subject to IRA rules and not to qualified plan rules. Also,
If you filed your tax return for the first tax year following
the deemed IRA and contributions to it are not taken into
your tax year that included September 11, 2001, before
account in applying qualified plan rules to any other contri-
July 22, 2003, you owned the property as of the first day of
butions under the plan. Voluntary employee contributions
that tax year, and the second succeeding tax year after
must be designated as such by employees covered under
your tax year that included September 11, 2001, ends
the plan. They are includible in income.
before August 1, 2004, file Form 3115 with your timely filed
tax return for that second succeeding tax year.
Qualified plan. For deemed IRA purposes, qualified
Write “Automatic Change Filed Under Rev. Proc.
plans are defined contribution plans, defined benefit plans,
2003-50” on the appropriate line of Form 3115. For more
annuity plans described in section 403(a), 403(b) plans, or
information, see Revenue Procedure 2003 – 50 in Internal
section 457 deferred compensation plans.
Revenue Bulletin 2003 – 29.
Amending the plan. If you want to provide a deemed IRA
for your employees, you will have to amend your plan. For
information on amending your plan, see Revenue Proce-
dure 2003 –13 in Internal Revenue Bulletin 2003 –4.
3.
Thrift Savings Plan (TSP)
IRAs and Other
Catch-up contributions. Beginning in 2003, participants
Retirement Plans
in the TSP who are age 50 or over at the end of the year
generally can make catch-up contributions to the plan. For
2003, the maximum catch-up contribution is $2,000. For
2004, the maximum increases to $3,000.
2003 Changes
403(b) Plans
Individual Retirement
Increase in the limit on elective deferrals. For 2003, the
Arrangements (IRAs)
limit on elective deferrals increased from $11,000 to
$12,000. The limit on elective deferrals will increase by
For more information about IRAs, see Publication 590,
$1,000 each year through 2006.
Individual Retirement Arrangements (IRAs).
Catch-up contributions. For 2003, if you were age 50 or
older by the end of the year, you may be permitted to make
Modified AGI Limit for
additional catch-up contributions of up to $2,000 to your
Traditional IRAs Increased
403(b) plan.
More information. For more information about 403(b)
For 2003, if you were covered by a retirement plan at work,
plans, see Publication 571, Tax-Sheltered Annuity Plans
your deduction for contributions to a traditional IRA is
(403(b) Plans).
reduced (phased out) if your modified adjusted gross in-
come (AGI) is:
401(k) Plans
•
More than $60,000 but less than $70,000 for a mar-
ried couple filing a joint return or a qualifying
The following changes apply to 401(k) plans. For more
widow(er),
information, see Publication 560, Retirement Plans for
•
Small Business.
More than $40,000 but less than $50,000 for a single
individual or head of household, or
Elective deferrals. The limit on elective deferrals for par-
•
ticipants in 401(k) plans (excluding SIMPLE plans) is as
Less than $10,000 for a married individual filing a
follows.
separate return.
For all filing statuses other than married filing separately,
Year
Limit
the upper and lower limits of the phaseout range increased
2003 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$ 12,000
by $6,000. For more information, see How Much Can You
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
13,000
Deduct? in chapter 1 of Publication 590.
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14,000
Chapter 3 IRAs and Other Retirement Plans
Page 15
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