Taxpayers will be allowed to contribute more money to their retirement savings in 2015 under new pension plan limits announced by the IRS on Thursday. The IRS annually adjusts the limitations on pension plan contributions in cases where cost-of-living increases meet the statutory requirements for inflation adjustment.
A list of the more significant items that are increased for 2015 includes:
- The elective deferral limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,500 in 2014 to $18,000 in 2015.
- The catch-up contribution limit for employees age 50 and over who participate in one of the plans listed above is increased from $5,500 in 2014 to $6,000 in 2015.
- The ability of taxpayers who are covered by workplace retirement plans to make a deductible individual retirement arrangement (IRA) contribution is phased out for singles and heads of household who have modified adjusted gross incomes (AGIs) between $61,000 and $71,000. For married couples filing jointly, where the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phaseout range is $98,000 to $118,000. When an IRA contributor is not covered by a workplace retirement plan but is married to someone who is, the deduction is phased out if the couple’s income is between $183,000 and $193,000.
- For taxpayers making contributions to Roth IRAs, the phaseout range for determining the maximum contribution is $183,000 to $193,000 for married couples filing jointly and $116,000 to $131,000 for singles and heads of household.
- The AGI limit for the saver’s credit is $61,000 for married couples filing jointly, $45,750 for heads of household, and $30,500 for single taxpayers and for married individuals filing separately.