♠ Posted by Marc J. Soss at Thursday, October 23, 2014
Taxpayers can now put
aside a little more toward their retirement in 2015, according to the Internal
Revenue Service.
The agency has adjusted
the maximum contribution allowed for pension plans and other retirement funds
for tax year 2015, it announced today, a change reflecting cost-of-living
increases.
Taxpayers 50 years old
and over can contribute up to $24,000 in retirement funds for 2015, an increase
of $1,000 from 2014.
Though some limits
remain unchanged from last year, several ceilings have increased. Some of the
changes include:
• The elective deferral
(contribution) limit for employees who participate in 401(k)s, 403(b)s, most
457 plans and the federal government’s Thrift Savings Plan has been increased
from $17,500 to $18,000.
• The catch-up
contribution limit for employees aged 50 and over who participate in those same
plans has been increased from $5,500 to $6,000.
• The limit on annual
contributions to an IRA remains unchanged at $5,500. The additional catch-up
contribution limit for individuals aged 50 and over is not subject to an annual
cost-of-living adjustment and remains $1,000.
• The deduction for
taxpayers making contributions to a traditional IRA has been phased out for
singles and heads of households who are covered by a workplace retirement plan
and have modified adjusted gross incomes (AGI) between $61,000 and $71,000, up
from $60,000 and $70,000 in 2014. For married couples filing jointly, the
income phase-out range is $98,000 to $118,000, up from $96,000 to
$116,000.
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, up from $181,000 and $191,000. For a married individual
filing a separate return who is covered by a workplace retirement plan, the
phase-out range is not subject to an annual cost-of-living adjustment and
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, up from $181,000 to $191,000 in 2014. 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.
• Low and moderate
income savers who receive a credit for their AGI (also known as the retirement
savings contribution credit) will see the credit rise. It will be $61,000 for
married couples filing jointly, up from $60,000 in 2014; $45,750 for heads of
household, up from $45,000; and $30,500 for married individuals filing
separately and for singles, up from $30,000.
