The IRS recently announced that taxpayers can put more away for retirement in 2015. These changes are taking place because the cost-of-living index met specific thresholds that triggered the adjustments. The changes are outlined below:
401(k), 403(b), most 457 & Thrift Savings Plans
- The elective deferral (contribution) limit for employees is being increased from $17,500 to $18,000.
- Catch-up contributions for those 50 and older has been increased from $5,500 to $6,000.
IRAs
- The annual contribution limit is remaining unchanged at $5,500.
- Catch up contributions for those 50 and older also remains unchanged at $1,000.
Roth IRAs
- The adjusted gross income phase out for taxpayers making contributions is:
- Singles & Heads of Household: $116,000 to $131,000
- Married couples filing jointly: $183,000 to $193,000
- Married filing separate: $0 to $10,000
Tax Deductions
- The modified adjusted gross income phase out limits are:
- Singles & heads of household who are covered by workplace retirement plan: $61,000 to $71,000
- Married filing jointly where the contributing spouse is covered by workplace retirement plan: $98,000 to $118,000
- Married filing jointly where the contributing spouse is not covered by workplace retirement plan, but is married to someone who is covered: $183,000 to $193,000
- Married individual filing separate who is covered by workplace retirement plan: $0 to $10,000
- The adjusted gross income limits for the saver’s credit for low and moderate-income workers:
- Singles and married filing separately: $30,500
- Heads of households: $45,750
- Married filing jointly: $61,000