2015 COLA Limits

by | Feb 4, 2015 | Institutional Services

The IRS has released the cost-of-living adjustments applicable to the dollar limitations for pension plans (and other items) for the 2015 tax year.

IRS Limits 2015 2014
401(k), SARSEP, 403(b), and 457 plan deferrals/catch-up $18,000/$6,000 $17,500/$5,500
SIMPLE plan deferrals/catch-up $12,500/$3,000 $12,000/$2,500
Compensation defining highly compensated employee* $120,000 $115,000
Compensation defining key employee/officer $170,000 $170,000
Defined benefit plan limit on annual benefits $210,000 $210,000
Defined contribution plan limit on annual additions $53,000 $52,000
Maximum compensation limit for allocation and accrual purposes $265,000 $260,000
IRA contributions/catch-up $5,500/$1,000 $5,500/$1,000
SEP minimum compensation limit for an allocation $600 $550
QLAC maximum $125,000 $125,000
SSA compensation limit $118,500 $117,000
* 2014 amount for use in 2015 plan year tests

 

Traditional IRA changes. There also are changes in 2015 to the adjusted gross income (AGI) “phaseout” limits for determining what portion of contributions to a traditional IRA are deductible. For taxpayers who are active participants filing a joint return (or qualified widow(er)s), the deduction is phased out with a combined AGI of $98,000 to $118,000 (up from $96,000 to $116,000). For taxpayers other than “married filing separate returns,” the deduction phaseout range is $61,000 to $71,000 AGI (up from $60,000 to $70,000). For a taxpayer who is not an active participant but whose spouse is an active participant, the deduction phaseout range is a combined AGI of $183,000 to $193,000 (up from $181,000 to $191,000).

Roth IRA changes. There is also an AGI-based limitation for determining the maximum Roth IRA contribution. For married taxpayers filing a joint return (or qualified widow(er)s), the contribution phaseout range is from $183,000 to $193,000 (up from $181,000 to $191,000). The AGI phaseout range for single taxpayers is $116,000 to $131,000 (up from $114,000 to $129,000).

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*Please Note: Limitations.  The scope of services to be provided depends upon the terms of the engagement, and the specific requests and needs of the client. BFSG does not serve as an attorney, accountant, or insurance agent.  BFSG does not prepare legal documents or tax returns, nor does it sell insurance products.  Please Also Note: Different types of investments involve varying degrees of risk.  Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by BFSG) or any financial planning or consulting services, will be profitable, equal any historical performance level(s), or prove successful.

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