What’s new for 2015?

31517488_sEach year, government agencies (e.g., the IRS) make inflation adjustments and set parameters for gifting, contributions to certain accounts, and other tax-/income-related items. The partial list below highlights recently announced changes for 2015 and includes components that most often impact our clients:

  • 401(k), 403(b) and most 457 plans contribution limit will increase from $17,500 to $18,000 per year
  • 401(k), 403(b) and most 457 plans catch-up contribution for employees aged 50 and over increased from $5,500 to $6,000 per year
  • Individual Retirement Account (IRA) contribution limit remains $5,500 per year and catch-up contribution of $1,000 per year remains unchanged
  • Health Savings Account (HSA) contribution limit (employer + employee) increased from $3,300 to $3,350 per year for individuals and from $6,550 to $6,650 per year for family. No change to the $1,000 per year catch-up for people aged 55 and older
  • Flexible Spending Account (FSA) employee contribution limit increases from $2,500 to $2,550 per year
  • Income subject to FICA payroll tax increases from $117,000 to $118,500 in a calendar year. The portion that employees and employers pay remains unchanged at 6.2% each.
  • Social Security benefit cost of living increase of 1.7%
  • Medicare Part B premiums remain at $104.90 for individuals with less than $85,000 of income and couples filing joint returns with less than $170,000 of income
  • The annual gift tax exclusion will stay the same at $14,000 per year, but the federal estate and lifetime gift tax exemption amounts increase to $5.43 million per person. In addition to this list there are other slight changes, such as the income limitations to be able to make contributions to Roth IRA accounts and tax deductible contributions to IRA accounts. Those details aren’t listed here, but we’re happy to discuss them with you.

At Woodward Financial Advisors, we practice proactive tax planning.  Many of the items listed above filter into client discussions involving retirement planning and taxes.  Please contact us (or your tax advisor) if you have questions about how to minimize your taxes in 2015.

About Jim Miller

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