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IRA and retirement plan limits for 2015

Provided by RBC Wealth Management
and Dave Dupont

The IRS recently announced changes to several inflation-adjusted tax items, including the 2015 federal income tax brackets and rates that will impact your 2015 tax return. The IRS also announced changes to 2015 retirement plan contributions limits and phase-outs.

Retirement plan contribution limits

The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan has increased from $17,500 to $18,000. The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan changed from $5,500 to $6,000.

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 aged 50 or older has also increased, to $3,000 (up from $2,500 in 2014).

IRA contribution limits 

The maximum amount you can contribute to a traditional IRA or Roth IRA in 2015 is $5,500 (or 100 percent of your earned income, if less). The maximum catch-up contribution for those aged 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 

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 are 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 

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). However, if you are 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).

The information included in this article is not intended to be used as the primary basis for making investment decisions. 

RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC

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