NEW YORK (MainStreet) — Workers who participate in employer-sponsored retirement plans will be able to put away more in 2015.
The maximum employee contribution to a 401(k), 403(b), 457, and federal Thrift Savings Plan increases from $17,500 to $18,000.
And the “catch-up” contribution to these plans, for employees who are age 50 or older at the end of the year, increases from $5,500 to $6,000. Employees age 50 or older can contribute a maximum of $24,000 to a 401(k), 403(b), 457, or Thrift Savings Plan in 2015, $1,000 more than 2014.
The maximum traditional and Roth IRA contribution for 2015 remains unchanged at $5,500, and the “catch-up” contribution stays at $1,000.
The maximum contribution to a SIMPLE Plan, available to self-employed taxpayers and their employees, increases from $12,000 to $12,500 for 2015. The “catch-up” contribution to a SIMPLE Plan increases from $2,500 to $3,000.
The allowable Form 1040 deduction for contributions to a traditional IRA by taxpayers who are active participants in an employer retirement plan is phased out on 2015 returns for Single and Head of Household filers with Adjusted Gross Income (AGI) between $61,000 and $71,000 and for those who are Married Filing Joint and Qualifying Widow(er) with AGI of $98,000 to $118,000.
The phase-out range for a married taxpayer filing a separate return who is covered by an employer plan remains at $0 - $10,000.
The deduction on a joint return for a spouse that is not an active participant in an employer plan but who is married to one who is phases out at AGI of $183,000 to $193.000.
The amount that can be contributed to a Roth IRA in 2015 is phased-out for taxpayers with AGI of between $116,000 to $131,000 for Single and Head of Household filers and $183,000 to $193,000 for Married Filing Joint and Qualifying Widow(er).
--Written by Robert D. Flach for MainStreet