The IRS has announced cost-of-living adjustments affecting dollar limitations for retirement plans and related items for tax year 2015. Highlights include:
- The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans is increased from $17,500 to $18,000.
- The catch-up contribution limit for those aged 50 and over is increased from $5,500 to $6,000.
- The limit on annual contributions to an individual retirement arrangement (IRA) remains unchanged at $5,500.
The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) 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 is $98,000 to $118,000, up from $96,000 to $116,000.
- For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $183,000 and $193,000, up from $181,000 and $191,000.
Additional information on the adjusted and unchanged limitations is available in the IRS cost-of-living adjustment table.