2012 Contribution Limits

• The Social Security Wage Base for 2012, beginning January 1, 2012 will increase for the first time in several years.  The wage base increases from $106,800 to $110,100.

• The maximum annual amount an employee can contribute to a 401(k) Plan during 2012 increases to $17,000.  Employees age 50 and above can contribute an additional “catch-up” contribution of $5,500, for a total maximum contribution of $22,500.

• The maximum annual amount an employee can contribute to a traditional IRA or a Roth IRA in 2012 is $5,000; employees age 50 and above can contribute up to $6,000.

• Simple IRA’s have a maximum annual contribution of $11,500 for employees in 2012; employees age 50 and above can contribute up to $14,000.

• Colorado’s Minimum Wage increases from $7.36 per hour to $7.64 per hour, effective January 1, 2012.  The Tipped Employee’s Minimum Wage increases to $4.62 per hour, also effective January 1, 2012.

• The 2012 IRS standard mileage rate has not been announced.  Please note that the 2011 IRS standard mileage rate changed at mid-year.  From January 1, 2011 to June 30, 2011 the rates were:  $0.51 cents per mile for business miles driven; $0.19 cents per mile for medical or moving purposes; and $0.14 cents per miles driven in service of charitable organizations.  Effective July 1, 2011 the business mileage rate increased to $0.555 cents per mile; medical rate increased to $0.215 per mile, and the charitable rate remained unchanged at $0.14 per mile.  Gasoline prices have been more exciting than a wild roller coaster ride, so look for changes in the standard rates during 2012.

• Employers are required to comply with the following federal legislation (number of employees listed in parenthesis):

> Immigration Reform and Control Act (Form I-9) (1 or more employees)

> Colorado Affirmation form (1 or more employees)

> USERRA (1 or more employees)

> Fair Labor Standards Act (1 or more employees)

> Americans with Disabilities Act (15 or more employees)

> Age Discrimination in Employment Act (20 or more employees)

> Family and Medical Leave Act (50 or more employees)

> EEO-1 Reports (100 or more employees; 50 or more for federal contracts)

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