2012 Contribution Limits

and Tax Reference Guide

RETIREMENT

Tax-advantaged accounts: Retirement Plans (2012 tax year)

Traditional IRA contribution limits SEP IRA contribution limits

Under age 50 $5,000*  Discretionary employer contributions of up to the lesser of $50,000 or 25%
of employee compensation or 20% of net earnings from self employment.*
Age 50 and above $6,000**
 A minimum of $550 in compensation required to participate in SEP.
Phase-out ranges for IRA contribution deductibility *A maximum compensation cap of $250,000 per employee applies.

Married, filing jointly $92,000 - $112,000 MAGI***

Married, filing separately $0 - $10,000 MAGI
401(k), 403(b)*, 457**, SARSEP contribution limits

Single and head of household $58,000 - $68,000 MAGI Salary deferral

Spousal IRA filing jointly, Under age 50 $17,000***
IRA of nonparticipant $173,000 - $183,000 MAGI
Age 50 and above $22,500****
Full deduction is permitted below phaseout range. Scaled partial deduction is
permitted within range. No deduction is permitted above range. An IRA owner Maximum contributions
under age 70 1/2 with earned income can make a fully deductible contribution, regard-  Maximum total contributions per employee are limited to $50,000 or
less of his/her MAGI, if neither he/she nor his/her spouse (if married) is an active 100% of compensation with a $250,000 compensation cap per employee.
participant in an employer plan. If one or both are active plan participants, the above ($49,000/100%/$245,000 in Puerto Rico, except that dual qualified
deductibility phase-out ranges apply. Qualified clients not eligible for deductible plans apply the $250,000 limit.)
contributions may make nondeductible contributions up to the annual limit.  401(k) and profit-sharing plans may be combined, but share a single
*Or 100% of taxable compensation, whichever is less limit.
**Includes $1,000 “catch-up” contribution *Employees of certain organizations may be eligible to contribute greater amounts.
Merrill Lynch is no longer allowing additional contributions to 403(b) plans.
***Modified adjusted gross income
**Contributions may be doubled in the last three years before retirement, but
catch-up cannot be used. Merrill Lynch does not offer 457 plans.
Roth IRA contribution limits ***In Puerto Rico, the maximum 401(k) deferral is $13,000.
****Includes $5,500 catch-up contribution. (In Puerto Rico, the 401(k) catch-up
contribution limit is $1,500.)
Under age 50 $5,000*
Age 50 and above $6,000**
Simple IRA salary deferral contributions
Phase-out ranges for Roth contribution eligibility
Married, filing jointly $173,000 - $183,000 MAGI Under age 50 $11,500

Married, filing separately $0 - $10,000 MAGI Age 50 and above $14,000*

Single and head of household $110,000 - $125,000 MAGI *Includes $2,500 catch-up contribution

Roth conversion income is not included in MAGI. Full contribution is permitted

below phase-out range. Scaled partial contribution is permitted within range. No Highly compensated employee
contribution is permitted above range.
*Or 100% of taxable compensation, whichever is less  A highly compensated employee is a person who was a 5% owner at
**Includes $1,000 catch-up contribution any time during the determination year or the preceding year, or for
the preceding year received more than $115,000 in compensation
Roth IRA conversions from the employer and, if the employer elects, also was in the “top-
paid group” (top 20%) of employees for that year.*
All filing statuses No MAGI limit
 Key employee – officer: $165,000
If you completed a 2010 Roth IRA conversion and elected to amortize your resulting * In Puerto Rico, a highly compensated employee is one who received more than
income, you will include 50% of such income on your 2011 tax return and the $110,000 in compensation; no “top-paid” election is available.
remaining 50% on your 2012 tax return.

Defined benefit plan

 Lesser of $200,000 ($195,000 in Puerto Rico) or 100% of the

participant’s average compensation for his/her three high consecutive
years of active plan participation.

Saver’s tax credit

 Single taxpayers and married individuals filing separately with MAGI

Please see last page for important information below $28,750, heads of household with MAGI below $43,125 and
joint filers with MAGI below $57,500 may be eligible for a tax credit
Investment products: for an IRA, 401(k), 403(b) or 457 employee plan contribution, in
addition to any deduction or exclusion that would otherwise apply.
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
Tax-advantaged accounts: Education Plans (2012 tax year)
Section 529 College Savings Account Coverdell Education Savings Account

No age or income restrictions for contributors or beneficiaries Beneficiaries under age 18 and special
needs beneficiaries of any age (maximum contribution) $2,000
Five-Year
Annual Contribution Made Phase-out ranges for Coverdell ESA contribution eligibility
Contribution* in a Single Year**
Single $95,000 - $110,000 MAGI
Single $13,000 $65,000
per beneficiary per beneficiary Married, filing jointly $190,000 - $220,000 MAGI

Married couple $26,000 $130,000

filing jointly per beneficiary per beneficiary Student loans

*Contributions are completed gifts subject to the annual gift-tax exclusion and Student loan interest deduction limit $2,500
are removed from the contributor’s federal estate.
**Contributions between $13,000 and $65,000 ($26,000 and $130,000 for married Phase-out ranges for student loan interest deduction eligibility
couples filing jointly) made in one year can be prorated over a five-year period
without subjecting you to gift tax or reducing your federal unified estate and Single and head of household $60,000 - $75,000 MAGI
gift tax credit. If you contribute less than the $65,000 ($130,000 for married
couples filing jointly) maximum, additional contributions can be made without
Married, filing jointly $125,000 - $155,000 MAGI
you being subject to federal gift tax, up to a prorated level of $13,000 ($26,000
for married couples filing jointly) per year. Gift taxation may result if a contri-
bution exceeds the available annual gift tax exclusion amount remaining for Lifetime learning credits
a given beneficiary in the year of contribution. For contributions between
$13,000 and $65,000 ($26,000 and $130,000 for married couples filing jointly) 20% of first $10,000 of educational expenses (max $2,000) per taxpayer
made in one year, if the account owner dies before the end of the five-year
period, a prorated portion of the contribution may be included in his or her Phase-out amounts for credit eligibility
estate for estate tax purposes. Also, any appreciation on the entire original
gift is not considered part of the estate. Single and head of household $52,000 - $62,000 MAGI
Married, filing jointly $104,000 - $124,000 MAGI
Section 529 plan tax treatment
American Opportunity Tax Credit
 Section 529 plan earnings grow federal and, in most cases, state
income-tax-free as long as the withdrawals are used for qualified
higher education expenses. The earnings portion of withdrawals for 100% of first $2,000 of education expenses; 25% of expenses between
nonqualified expenses will be subject to federal income tax and a $2,000 and $4,000 (maximum credit is $2,500) per eligible student
10% additional federal tax, and may also be subject to state income Phase-out ranges for credit eligibility
or other taxes.
Single and head of household $80,000 - $90,000 MAGI

Section 529 plan disclosure Married, filing jointly* $160,000 - $180,000 MAGI
*Credit not available if married, filing separately.
 Before you invest in any Section 529 college savings plan, request
an official statement and read it carefully. The official statement
includes more complete information, including investment objectives, Phase-out of exclusion of U.S. savings bond income
charges, expenses and risks of investing in the plan, which you
should consider carefully before investing. You should consider By payor of qualified higher-education expenses
whether your home state or your designated beneficiary’s home
state offers any state tax or other benefits that are only available Married, filing jointly $109,250 - $139,250 MAGI
for investments in such state’s 529 plan. Section 529 plans are not All others $72,850 - $87,850 MAGI
guaranteed by any state or federal agency.

HSA Contribution and Plan Limits (2012 Tax Year)

HSA Limits

The following table shows the minimum annual deductible and maximum annual deductible and other out-of-pocket expenses for high deductible health
plans (HDHPs) for 2012.
Minimum Deductible Maximum Out-of-Pocket* Contribution Limit 55+ Contribution
Single $1,200 $6,050 $3,100 $1,000
Family $2,400 $12,100 $6,250 $1,000
*These limits do not apply to deductibles and expenses for out-of-network services if the plan uses a network of providers. Instead, only deductibles and out-of-pocket
expenses for services within the network should be used to figure whether the limits apply.
To be an eligible individual and qualify for an HSA, you must:
 be covered under an HDHP on the first day of the month,
 have no other health coverage*,
 not be entitled to (and enrolled in) Medicare benefits, and
 not be claimed as a dependent on someone else’s tax return.
For more detailed information on HSAs and taxes, visit the U.S. Department of Treasury Web site at www.ustreas.gov or talk with your tax advisor.
*Coverage under a limited-purpose health care flexible spending arrangement is permissible.

2 Merrill Lynch Wealth Management • 2012 Contribution Limits and Tax Reference Guide
Federal Tax Brackets (2012 tax year)
Single Married, filing separately

Taxable income over But not over Tax rate is Taxable income over But not over Tax rate is

$0 $8,700 10% $0 $8,700 10%

$8,700 $35,350 $870 plus 15%* $8,700 $35,350 $870 plus 15%*
$35,350 $85,650 $4,867.50 plus 25%* $35,350 $71,350 $4,867.50 plus 25%*
$85,650 $178,650 $17,442.50 plus 28%* $71,350 $108,725 $13,867.50 plus 28%*
$178,650 $388,350 $43,482.50 plus 33%* $108,725 $194,175 $24,332.50 plus 33%*
$388,350 $112,683.50 plus 35%* $194,175 $52,531 plus 35%*

* of the excess over the taxable income in the far left-hand column. * of the excess over the taxable income in the far left-hand column.

Married, filing jointly/qualifying widow(er) Estate and trusts

Taxable income over But not over Tax rate is Taxable income over But not over Tax rate is

$0 $17,400 10% $0 $2,400 15%

$17,400 $70,700 $1,740 plus 15%* $2,400 $5,600 $360 plus 25%*
$70,700 $142,700 $9,735 plus 25%* $5,600 $8,500 $1,160 plus 28%*
$142,700 $217,450 $27,735 plus 28%* $8,500 $11,650 $1,972 plus 33%*
$217,450 $388,350 $48,665 plus 33%* $11,650 $3,011.50 plus 35%*
$388,350 $105,062 plus 35%*
* of the excess over the taxable income in the far left-hand column.
* of the excess over the taxable income in the far left-hand column.

Long-term capital gains and qualified dividend rates

Head of household
The top federal tax rate for long-term capital gains or qualified dividend
Taxable income over But not over Tax rate is income is 15% (0% for individuals in the 10% or 15% tax brackets).
$0 $12,400 10% Gains on collectibles maximum 28%
$12,400 $47,350 $1,240 plus 15%*
$47,350 $122,300 $6,482.50 plus 25%* Unrecaptured 1250 depreciation maximum 25%
$122,300 $198,050 $25,220 plus 28%*
$198,050 $388,350 $46,430 plus 33%*
Gift and estate taxes
$388,350 109,229 plus 35%*

* of the excess over the taxable income in the far left-hand column. Gift tax annual exclusion $13,000
Unified estate, gift, and generation-skipping
transfer tax exemption $5.12 million
Annual exclusion for gifts to noncitizen spouse $139,000
Top gift-tax rate 35%
Top estate-tax rate 35%
Single generation-skipping transfer tax rate 35%

Deductions (2012 tax year)

Standard deductions Exemptions

Married, filing jointly $11,900 Personal and dependent* $3,800

Single $5,950 Kiddie tax $950
Married, filing separately $5,950 * No phase-out in 2012
(assuming spouse does not itemize, otherwise $0)
Head of household $8,700

The additional standard deduction amount for the aged and blind is $1,150 for
each. These amounts are increased to $1,450 if the individual also is unmarried
and not a surviving spouse.

Merrill Lynch Wealth Management • 2012 Contribution Limits and Tax Reference Guide 3
Social Security (2012 tax year)
Maximum earnings subject to FICA $110,100
(For 2011, the Social Security portion of the employee FICA tax rate was 4.2%. As of the date of publication of this guide, it is not clear
whether the rate for 2012 will remain at 4.2%, revert to 6.2%, or equal some other percentage.)
Post-retirement

The amount of Social Security benefit payments (if any) subject to tax depends on the amount of the taxpayer’s provisional income (AGI plus one-half of
the Social Security benefits plus tax-exempt bond interest plus certain other adjustments).
If provisional income exceeds $32,000 ($25,000 for single and head of household), then the amount of Social Security benefits included in gross
income is the lesser of:
 50% of the Social Security benefits received that year or
 50% of the excess of provisional income over $32,000 (or $25,000).
However, if provisional income exceeds $44,000 ($34,000 for single and head of household), then the amount of Social Security benefits included in
gross income is the lesser of:
 85% of the Social Security benefits received that year, or the sum of:
– The amount included under the above 50% rule or, if less, one-half of the difference between $44,000 (or $34,000) and $32,000 (or $25,000) and
– 85% of the excess of provisional income over $44,000 ($34,000).

The information herein is for informational purposes only and should not be construed as tax advice. Merrill Lynch
does not provide tax, accounting or legal advice. You should review any planned financial transactions or arrange-
ments that may have tax, accounting or legal implications with your personal professional advisors.

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and cannot be used, for the purpose of avoiding U.S. federal tax penalties.

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4 Merrill Lynch Wealth Management • 2012 Contribution Limits and Tax Reference Guide