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What does “Individual may receive up to $45,000 in contributions to 401(k) account” mean?



Sec 415(c) of the IRS Code contains limits for annual contributions to defined contribution plans. The limit for 2007 is $45,000 for annual additions to such plans for employer contributions, employee contributions and forfeitures. The elective deferral limit for employees of 15,500 is a separate limit but that figure also counts against the 45,000. Catch up contributions for those age 50 and above do not count against the 45,000 limit.



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