Did you know that annual contribution limits for tax-qualified employer-sponsored plans might increase annually? This increase (or decrease) is determined by cost-of-living adjustments provided for under the Internal Revenue Code. Thanks to a combination of contribution limit increases, participants in many employer-sponsored plans may significantly increase their contributions to those plans. As a result of those limit increases, many participants in 403(b) plans, 401(k) plans and 457(b) plans are able to make voluntary contributions of as much as 100% of includible compensation up to an elective deferral limit or, for 457(b) plans, a dollar limit of $17,000 in 2012.

In addition, employees in many of those same plans who are age 50 or older may contribute an additional $5,500 in 2012 as an age-based catch-up contribution.

Catch-up deferrals do not count toward otherwise applicable limits or nondiscrimination tests, and they also generally cannot be layered on top of certain otherwise available catch-up limitation in 457(b) plans. However, catch-up deferrals for 403(b) programs, such as the $3,000 service-based catch-up contribution limit, may be made in addition to the increased 402(g) limit for certain long-time employees of qualifying employers ("cap expansion").

Contributions limits to traditional and Roth IRAs remain at $5,000 in 2012 ($6,000 for ages 50 and older). Contributions to Roth IRAs are limited based on modified adjusted gross income.

IRA owners age 50 and older are also able to make annual catch-up contributions of $1,000 in 2012.

Finally, compensation that may be taken into consideration in determining employer contributions to tax-qualified plans and 403(b) plans under IRC section 401(a)(17) is $250,000 in 2012.