The maximum amount WSU employees may defer from their paycheck into retirement savings has increased for 2005. In each of the two programs offered, the maximum has gone from $13,000 in 2004 to $14,000 for 2005. Employees may start, stop or make changes to their accounts at any time.
The two programs in which employees may participate are:
• The Deferred Compensation Program (DCP), which the state Department of Retirement Systems administers. State employees are eligible to participate, whether full- or part-time, working a regular schedule or career seasonal. To enroll in DCP, a minimum deferral of $30 per month ($15 per pay period) is required.
More information can be found on the DCP Information Line at 888-327-5596 or by logging on to http://www.wa.gov/DRS.dcp.
• The Tax Deferred Investment (TDI) program offered at WSU by the Teachers Insurance and Annuity Association – College Retirement Equities Fund (TIAA-CREF). This previously was called SRA — Supplemental Retirement Accounts. TIAA-CREF is a large nonprofit headquartered in New York City with offices locally in Seattle.
WSU employees may make pretax contributions to either or both of these retirement savings accounts. Thus, one could invest up to a maximum of $28,000 by saving the limit of $14,000 in each program.
In addition, if you are over the age of 50, you may be able to save even more with the catch-up option. Also, those over age 50 may defer an additional $4,000 beyond the maximum annual deferral in each of the two programs; that’s up from an additional $3,000 allowed in 2004.
TIAA-CREF rep on campus
The WSU representative from TIAA-CREF is on the Pullman campus often to meet with employees. This semester, the dates will be Jan. 25-27, Feb. 22-24, March 22-24, April 12-14, May 2-4 and June 14-16. Call Jodie Freid at TIAA-CREF, toll-free at 877-209-3142, extension 2615, to schedule a personal financial consultation, or visit the website at http://www.tiaa-cref.org/moc.
Law allows deduction for sales taxes, some other taxes
A law passed in the fall allows U.S. taxpayers to choose to deduct state and local sales taxes, instead of state and local income taxes, on their federal tax forms.
That’s a new deduction for Washington taxpayers, who pay sales taxes but no state income taxes.
In Washington, the amounts of the deduction range from $389 to nearly $2,000, according to IRS tables that determine the deduction for each state by income and number of exemptions.
The deduction is available for 2004 and 2005.
The new law also could help taxpayers from any state who made major purchases during the year. Taxes paid on a home, car, boat, home remodeling materials and more can be deducted in addition to the sales-tax deduction.
Be sure to check the IRS tables to see which is larger for you — the sales-tax or income-tax deduction.