If you’ve been maxing out your annual contribution limit on certain retirement plans, it may be possible to increase your contributions…starting now!
For 2015 the IRS has increased annual contribution limits on several types of Defined Contribution retirement plans (i.e. 401(k), 457, TSA, etc.), and that limit is now $18,000/year. And for those participants who are age 50 or older, the ‘catch-up’ provision has been raised to $6,000/year. Combined, that’s $2,000/mo that can be harbored away from current income tax!
The Roth IRA phase-out “adjusted gross income” limit has also increased to the range of $183,000 – $193,000 for married couples, and $116,000 – $131,000 for single filers.
Both Roth IRA and Traditional IRA limits remain unchanged for 2015 at $5,500/year with an additional $1,000/year catch-up provision for those 50 years of age and older.
Estate Tax exemption limits have increased to $5,430,000 per person (or $10,860,000 for a married couple utilizing the marital deduction). All estate value that passes to heirs beyond these limits will incur a 40% estate tax, the same as last year.
Affordable Care Act (Obama-care) is now an active part of the tax code. Per the IRS.gov website, here’s the rules:
If you don’t have coverage in 2015, you’ll pay the higher of these two amounts:
- 2% of your yearly household income. (Only the amount of income above the tax filing threshold, about $10,000 for an individual, is used to calculate the penalty.) The maximum penalty is the national average premium for a bronze plan.
- $325 per person for the year ($162.50 per child under 18). The maximum penalty per family using this method is $975.
There are many more subtle tax rules, provisions, changes, and limits that are now in effect. The items I pointed out above barely scratch the surface of our tax laws/limits. You and I can discuss how some of these increased limits can help to minimize your tax liabilities. However, I would advise you to seek professional tax advice for specific tax issues when it comes to creating a strategy for you.
Let me know how I can help!