Stacy Bush, Valdosta Today Financial Contributor:
IRA contribution limits
The maximum amount you can contribute to a traditional IRA or Roth IRA in 2015 is $5,500 (or 100% of your earned income, if less), unchanged from 2014. The maximum catch-up contribution for those age 50 or older remains at $1,000. (You can contribute to both a traditional and Roth IRA in 2015, but your total contributions can’t exceed these annual limits.)
Traditional IRA deduction limits for 2015
The income limits for determining the deductibility of traditional IRA contributions have increased for 2015 (for those covered by employer retirement plans). For example, you can fully deduct your IRA contribution if your filing status is single/head of household and your income (“modified adjusted gross income,” or MAGI) is $61,000 or less (up from $60,000 in 2014). If you’re married and filing a joint return, you can fully deduct your IRA contribution if your MAGI is $98,000 or less (up from $96,000 in 2014). If you’re not covered by an employer plan but your spouse is, and you file a joint return, you can fully deduct your IRA contribution if your MAGI is $183,000 or less (up from $181,000 in 2014).
Roth IRA contribution limits for 2015
The income limits for determining how much you can contribute to a Roth IRA have also increased. If your filing status is single/head of household, you can contribute the full $5,500 to a Roth IRA in 2015 if your MAGI is $116,000 or less (up from $114,000 in 2014). And if you’re married and filing a joint return, you can make a full contribution if your MAGI is $183,000 or less (up from $181,000 in 2014). (Again, contributions can’t exceed 100% of your earned income.)
Employer retirement plans
The maximum amount you can contribute (your “elective deferrals”) to a 401(k) plan has increased for 2015. The limit (which also applies to 403(b), 457(b), and SAR-SEP plans, as well as the Federal Thrift Plan) is $18,000 in 2015 (up from $17,500 in 2014). If you’re age 50 or older, you can also make catch-up contributions of up to $6,000 to these plans in 2015 (up from $5,500 in 2014). (Special catch-up limits apply to certain participants in 403(b) and 457(b) plans.)
If you participate in more than one retirement plan, your total elective deferrals can’t exceed the annual limit ($18,000 in 2015 plus any applicable catch-up contribution). Deferrals to 401(k) plans, 403(b) plans, SIMPLE plans, and SAR-SEPs are included in this limit, but deferrals to Section 457(b) plans are not. For example, if you participate in both a 403(b) plan and a 457(b) plan, you can defer the full dollar limit to each plan–a total of $36,000 in 2015 (plus any catch-up contributions).
The amount you can contribute to a SIMPLE IRA or SIMPLE 401(k) plan has increased to $12,500 for 2015, up from $12,000 in 2014. The catch-up limit for those age 50 or older has also increased, to $3,000 (up from $2,500 in 2014).
Stacy Bush has practiced independent financial advising in the Valdosta area for 14 years. Growing up on a farm in Donalsonville, Georgia, he is keen to the financial needs of South Georgia and North Florida families. Stacy and his wife, Carla, live in Valdosta with their four children. You can submit questions about this article to askstacybush@lpl.com
