The Internal Revenue Agency (IRS) has announced the 2015 401(k) and IRA Contribution Limits, which were published on October 23, 2014. Changes were made to the investment limitations due to the increase in the cost-of-living expenses, which warranted an increase in 401(k) and IRA investment limits. The following explains the adjustments that have been made to contribution limits for the 2015 tax year.
The 401(k) and catch-up contribution limits or 2015 will increase by a total annual investment of $500, which increases the amount taxpayers may contribute towards their 401(k) plans to up to $18,000 – an increase from $17,500 from 2013/2014. Those over the age of 50-years-old are able to contribute an additional $6,000, allowing for a combined total investment of $24,000 in 2015 – an increase from $23,000 in 2013/2014.
The IRA contribution and catch-up contribution limit will remain the same as they were in 2014. Individuals can contribute up to $5,500 towards their IRA in 2015. Those over the age of 50-years-old are able to contribute an additional $1,000.
Those who are self-employed or are small business owners, adjustments have been made to 2015 SEP-IRAs and single 401(k) contribution limits increasing the amount $1,000 from 2014 to $53,000.
Some minor changes have also been made to the Roth IRA phase out. The Roth IRA phase out comes into play if your income is $183,000-193,000 for those filing joint tax returns – an increase of $2,000 from 2014. For singles, again, a $2,000 increase from 2014, the Roth IRA phase out comes into play if your income is $116,000-131,000.
Please let us know if you have any questions about the new contribution limits. For more information, please see the IRS publication.