From my friends at Entrust...  Good News!

The IRS reviews contribution limits each year. Increases and decreases are tied to inflation and cost-of-living calculations. In October the IRS announced it would be increasing employer contribution limits to SEP IRAs and Individual 401(k) plans for self-employed and small-business owners to $53,000 in 2015, up from $52,000. Additionally, those 50 and older will be able to make a “catch-up” deferral contribution of $6,000; a $500 increase from 2014.  Deferral contributions to SIMPLE IRAs, which require employers to make a minimum contribution to participants’ accounts, will increase to $12,500, up from $12,000.

The $500 boost was due to cost-of-living adjustments.

Contributions to Traditional IRAs, however, will remain unchanged in 2015, at a maximum of $5,500. IRA “catch-up” contributions for those 50 and older will remain $1,000. 

Additional adjustments to retirement plans in 2015 include changes to the modified adjusted gross income (MAGI) levels for Traditional IRA deduction and eligibility to make Roth contributions. In other words, these amounts are used to determine whether contributions are tax-deductible, and whether an individual is eligible to contribute to a Roth IRA. For more information regarding your situation, contract your tax advisor.

For Traditional IRAs, the deduction for taxpayers making contributions to a Traditional IRA will be phased out based an individual’s tax filing status and MAGI level.

  • For singles and head-of-household filers who are covered by a workplace retirement plan and have adjusted gross income between $61,000 and $71,000 (up from $60,000 and $70,000 in 2014).
  • For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range will be between $98,000 and $118,000 (up from $96,000 to $116,000).
  • An IRA contributor not covered by a workplace retirement plan, and is married to someone who is, will see a deduction phased out if the couple’s income is between $183,000 and $193,000 (up from $181,000 and $191,000).
  • The phase-out range does not change for married individuals who are covered by a work-sponsored plan and are filing a separate return. It remains $0 to $10,000.

For Roth IRAs, eligibility to make a Roth contribution will depend on the tax filing status and modified adjusted gross income of the individual.

  • Married couples filing jointly will see a phase-out range between $183,000 to $193,000 (up from $181,000 to $191,000.
  • Singles and heads of household will see a phase-out range between $116,000 to $131,000 (up from $114,000 to $129,000).
  • Married individuals filing a separate return will not see a change. It remains $0 to $10,000.

For more information about changes to contribution limits, read the full IRS announcement.

SUCCESS!

Darrell