Year-End Planning Information for 2014 & 1015
[alert style=”warning”]This is the fourth of our Year-End Tips for Tax Planning series. Every two weeks until the end of the year, we’ll give you ways to keep more of what you’ve earned. Use them as building blocks in your financial planning[/alert]
In our last post (see this link) we mentioned that knowledge is powerful. Effective tax planning requires that you know the dollar limits of all the existing options that could be used to reduce your taxable income and increase your net worth. If we included everything is this category in one chart, it would fill a book; however, we have managed to list most of the information you’ll require in planning for tax-qualified plans for this year and the next. You may want to bookmark this page in your browser for use now and next year.
For all our year-end tips, you can use this link. For our “Keeping the Wealth All in the Family” series, use this link.
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| Type of Retirement Plan |
2015 |
2014 | 2013 | 2012 |
| Elective Deferrals (401(k) and 403(b); not including adjustments and catch-ups) |
$18,000 | $17,500 | $17,500 | $17,000 |
| 457(b)(2) and 457(c)(1) Limits (not including catch-ups) |
$18,000 | $17,500 | $17,500 | $17,000 |
| Section 414(v) Catch-Up Deferrals to 401(k), 403(b), 457(b), or SARSEP Plan |
$6,000 | $5,500 | $5,500 | $5,500 |
| Defined Benefit Plans |
$210,000 | $210,000 | $205,000 | $200,000 |
| Defined Contribution Plans |
$53,000 | $52,000 | $51,000 | $50,000 |
| Annual Compensation Limit |
$265,000 | $260,000 | $255,000 | $250,000 |
| Annual Compensation Limit |
$395,000 | $385,000 | $380,000 | $375,000 |
| Highly Compensated Employee (“HCEs”) |
$120,000 | $115,000 | $115,000 | $115,000 |
| Individual Retirement Accounts (“IRAs”), for individuals 49 and below |
$5,500 | $5,500 | $5,500 | $5,000 |
| Individual Retirement Accounts (“IRAs”), for individuals 50 and above |
$6,500 | $6,500 | $6,500 | $6,000 |
| SIMPLE Retirement Accounts |
$12,500 | $12,000 | $12,000 | $11,500 |
| SEP Coverage |
$600 | $550 | $550 | $550 |
| SEP Compensation |
$265,000 | $260,000 | $255,000 | $250,000 |
| Tax Credit ESOP Maximum Balance |
$1,070,000 | $1,050,000 | $1,035,000 | $1,015,000 |
| Amount for Lengthening of 5-Year ESOP Period |
$210,000 | $210,000 | $205,000 | $200,000 |
| Maximum Amount for Qualified Longevity Annuity Contract Purchases |
$125,000 | $125,000 | N/A | N/A |
| Income Subject to Social Security Tax |
$118,500 | $117,000 | $113,700 | $110,100 |
| FICA Tax for employers |
7.65% | 7.65% | 7.65% | 7.65% |
| FICA Tax for employees |
7.65% | 7.65% | 7.65% | 5.65% |
| Social Security Tax for employers |
6.2% | 6.2% | 6.2% | 6.2% |
| Social Security Tax for employees |
6.2% | 6.2% | 6.2% | 4.2% |
| Medicare Tax for employees and employee |
1.45% | 1.45% | 1.45% | 1.45% |
| SECA Tax for self-employed workers |
15.3% | 15.3% | 15.3% | 13.3% |
| Social Security Tax for self-employed workers |
12.4% | 12.4% | 12.4% | 10.4% |
| Medicare Tax for self-employed workers |
2.9% | 2.9% | 2.9% | 2.9% |