IRA Contribution Limits
The maximum amount you can contribute to a traditional IRA or Roth IRA in 2015 is $5,500 (or 100% of your earned income, if less), unchanged from 2014. The maximum catch-up contribution for those age 50 or older remains at $1,000. (You can contribute to both a traditional and Roth IRA in 2015, but your total contributions can’t exceed these annual limits.)
Traditional IRA Deduction Limits for 2015
The income limits for determining the deductibility of traditional IRA contributions have increased for 2015 (for those covered by employer retirement plans). For example, you can fully deduct your IRA contribution if your filing status is single/head of household and your income (“modified adjusted gross income,” or MAGI) is $61,000 or less (up from $60,000 in 2014). If you’re married and filing a joint return, you can fully deduct your IRA contribution if your MAGI is $98,000 or less (up from $96,000 in 2014). If you’re not covered by an employer plan but your spouse is, and you file a joint return, you can fully deduct your IRA contribution if your MAGI is $183,000 or less (up from $181,000 in 2014).
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If your 2015 federal income tax filing status is:
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Your IRA deduction is reduced if your MAGI is between:
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Your deduction is eliminated if your MAGI is:
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Single or head of household
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$61,000 and $71,000
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$71,000 or more
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Married filing jointly or qualifying widow(er)*
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$98,000 and $118,000 (combined)
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$118,000 or more (combined)
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Married filing separately
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$0 and $10,000
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$10,000 or more
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*If you’re not covered by an employer plan but your spouse is, your deduction is limited if your MAGI is $183,000 to $193,000, and eliminated if your MAGI exceeds $193,000.
Roth IRA Contribution Limits for 2015
The income limits for determining how much you can contribute to a Roth IRA have also increased. If your filing status is single/head of household, you can contribute the full $5,500 to a Roth IRA in 2015 if your MAGI is $116,000 or less (up from $114,000 in 2014). And if you’re married and filing a joint return, you can make a full contribution if your MAGI is $183,000 or less (up from $181,000 in 2014). (Again, contributions can’t exceed 100% of your earned income.)
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If your 2015 federal income tax filing status is:
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Your IRA deduction is reduced if your MAGI is between:
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Your deduction is eliminated if your MAGI is:
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Single or head of household
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More than $116,000 but less than $131,000
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$131,000 or more
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Married filing jointly or qualifying widow(er)
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More than $183,000 but less than $193,000 (combined)
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$193,000 or more (combined)
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Married filing separately
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More than $0 but less than $10,000
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$10,000 or more
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Employer Retirement Plans
The maximum amount you can contribute (your “elective deferrals”) to a 401(k) plan has increased for 2015. The limit (which also applies to 403(b), 457(b), and SAR-SEP plans, as well as the Federal Thrift Plan) is $18,000 in 2015 (up from $17,500 in 2014). If you’re age 50 or older, you can also make catch-up contributions of up to $6,000 to these plans in 2015 (up from $5,500 in 2014). (Special catch-up limits apply to certain participants in 403(b) and 457(b) plans.)
If you participate in more than one retirement plan, your total elective deferrals can’t exceed the annual limit ($18,000 in 2015 plus any applicable catch-up contribution). Deferrals to 401(k) plans, 403(b) plans, SIMPLE plans, and SAR-SEPs are included in this limit, but deferrals to Section 457(b) plans are not. For example, if you participate in both a 403(b) plan and a 457(b) plan, you can defer the full dollar limit to each plan–a total of $36,000 in 2015 (plus any catch-up contributions).
The amount you can contribute to a SIMPLE IRA or SIMPLE 401(k) plan has increased to $12,500 for 2015, up from $12,000 in 2014. The catch-up limit for those age 50 or older has also increased, to $3,000 (up from $2,500 in 2014).
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Plan Type:
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Annual dollar limit:
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Catch-up limit:
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401(k), 403(b), governmental 457(b), SAR-SEP, Federal Thrift Plan
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$18,000
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$6,000
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SIMPLE plans
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$12,500
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$3,000
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Note: Contributions can’t exceed 100% of your income.
The maximum amount that can be allocated to your account in a defined contribution plan (for example, a 401(k) plan or profit-sharing plan) in 2015 is $53,000 (up from $52,000 in 2014), plus age-50 catch-up contributions. (This includes both your contributions and your employer’s contributions. Special rules apply if your employer sponsors more than one retirement plan.)
Finally, the maximum amount of compensation that can be taken into account in determining benefits for most plans in 2015 has increased to $265,000, up from $260,000 in 2014; the dollar threshold for determining highly compensated employees (when 2015 is the look-back year) is $120,000, up from $115,000 in 2014.
If you have questions or need assistance, contact the experts at Henssler Financial:
- Experts Request Form
- Email: experts@henssler.com
- Phone: 770-429-9166.
The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
