2015 Pension Plan and IRA Contributions Announced by IRS

On October 23, 2014, the IRS announced the 2015 pension plan and IRA limitations.

• The elective deferral limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is increased to $18,000. The catch-up contribution limit for employees aged 50 and over for these plans increases to $6,000.
  
• The limit on annual IRA contributions remains unchanged at $5,500. The additional catch-up contribution limit for individuals aged 50 and over also remains unchanged at $1,000.
  
• The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified AGI between $61,000 and $71,000. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $98,000 to $118,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple's income is between $183,000 and $193,000. For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range remains $0 to $10,000.
  
• The AGI phase-out range for taxpayers making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly (an increase from the 2014 range of $181,000 to $191,000). For singles and heads of household, the income phase-out range is $116,000 to $131,000, up from $114,000 to $129,000. For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
  
• The limitation for Section 415(c)(1)(A) defined contribution plans is increased to $53,000.
  
• The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased $500 to $12,500.
  
• Additional informaion can be found on the IRS website here.

Additional info about the author can be found at:  www.schwartzfinancial.com