IRS Posts New Retirement Account Limits for 2015

November 25, 2014 – The IRS has announced the 2015 contribution limits for both employer-sponsored plans and individual retirement accounts (IRAs). Increased limits may provide individuals and businesses with opportunities for additional tax savings in the coming year.

Employer-sponsored Plans

401(k), 403(b), and most 457 plans. In 2015, employees may defer up to $18,000 in earnings (up from $17,500 in 2014). For those 50 and older, the limit on supplemental “catch-up” contributions has increased from $5,500 to $6,000.

Defined contribution plans

The dollar limit on “annual additions” (generally, combined contributions of the employee and employer) to a participant’s account in a defined contribution plan, such as a 401(k) plan or a basic profit sharing plan, has increased from $52,000 to $53,000.

SIMPLE IRAs

The general limit on employee contributions to a SIMPLE IRA has increased from $12,000 to $12,500. The allowable catch-up contribution for employees 50 and older has increased from $2,500 to $3,000.

Individual Retirement Accounts

The limit for contributions to both traditional and Roth IRAs remains unchanged at $5,500, as does the $1,000 limit on catch-up contributions.

However, individuals who contribute to traditional IRAs and have workplace retirement plans will be allowed to have slightly more income in 2015 before they can no longer deduct their IRA contributions.

  • For single taxpayers and heads of household who are covered by a retirement plan at work, the deduction is phased out once modified adjusted gross income (MAGI) is between $61,000 and $71,000 (up from $60,000 and $70,000 for 2014).    
  • For married couples filing jointly when the spouse contributing to the IRA is also covered by a workplace retirement plan, the deduction is phased out once joint MAGI is between $98,000 and $118,000 (up from $96,000 and $116,000 for 2014)
  • For married couples filing jointly when the spouse contributing to the IRA is not the spouse with the workplace retirement plan, the deduction is phased out once joint MAGI is between $183,000 and $193,000 (up from $181,000 and $191,000 for 2014).

Similarly, the income phaseout levels for Roth IRA contributions have also increased.

  • For single taxpayers and heads of household, the income phaseout range is $116,000 to $131,000 (up from $114,000 to $129,000 for 2014).
  • For married couples filing jointly, the income phaseout range is $183,000 to $193,000 (up from $181,000 to $191,000 for 2014).

For more about what makes sense for your tax planning and retirement planning in 2015, please contact your Dopkins Tax Advisor or contact Robert Pollock at rpollock@dopkins.com.

About the Author

Dopkins Tax Advisory Group

Our more than 25 tax professionals include specialists who are proactive, strategic thinkers who work to maximize your cash flow. In addition to cash flow considerations, we also believe that tax planning is most effective when it is integrated with, and fully supports, your business plan and personal goals. Our approach to tax planning will help you better understand the tax implications of any proposed course of action, and together we can make the right decisions for your business. For more information, contact Robert Pollock, CPA at rpollock@dopkins.com.

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