Five Important Tax Changes in 2015

It’s a new year, which means it’s time to reflect on past priorities and establish a plan for the months ahead — particularly from a financial perspective. To ensure you stay on track to meet your goals in 2015, there are five important law changes you need to keep in mind:

1. Increased 401(k) Contribution Limits

In 2015, the contribution limit for 401(k) retirement plans is increasing by $500 to a total of $18,000, while the catch-up contribution for those age 50 and older has been upped from $5,500 to $6,000. These amounts also apply to 403(b) plans, most 457 plans and the federal government’s Thrift Savings Plan.

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2. Limitations on Individual Retirement Account (IRA) Rollovers

Starting January 1, you’re limited to one rollover from one IRA to another IRA every 12 months, regardless of how many IRAs you own. Taking a second rollover within the same year could result in tax consequences — and money out of your pocket.

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3. Increased Social Security Benefits

Social Security recipients will see their checks increase by 1.7% this year, due to the annual cost-of-living adjustment. This translates into an additional $22 each month for the average retiree, for a total of $1,328 per month. The average benefit for retired couples will increase by $36 to $2,176 per month.1

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4. Higher Income Limits for Traditional IRA Contributions

This year, the income limits for deductible contributions to traditional IRAs will change, based on whether you and/or your spouse are eligible to participate in an employer-sponsored retirement plan.

If you have a workplace retirement plan, you can claim a tax deduction for making a traditional IRA contribution until your modified adjusted gross income is between $61,000 and $71,000 for individuals and $98,000 and $118,000 for couples — up $1,000 and $2,000, respectively, from 2014. If you don’t have a workplace retirement plan, but your spouse does, you can claim the deduction until your income is between $183,000 and $193,000.

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5. Higher Income Limits for Roth IRA Contributions

In 2015, the income limits for Roth IRA contributions will increase for married couples with a modified adjusted gross income between $183,000 and $193,000, up from $181,000 and $191,000, respectively. For individuals and heads-of-household, the range increases to $116,000 and $131,000, up from $114,000 and $129,000 in 2014.

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To discuss how these changes may impact your financial plan, please call 888-520-3040 or search for an advisor at an office near you, using our interactive map: hewinsfinancial.com/about-us

 

Hewins Financial Advisors, LLC d/b/a Wipfli Hewins Investment Advisors, LLC (“Hewins”) is an investment advisor registered with the U.S. Securities and Exchange Commission (SEC) under the Investment Advisers Act of 1940. Hewins is a proud affiliate of Wipfli LLP. Information pertaining to Hewins’ advisory operations, services and fees is set forth in Hewins’ current Form ADV Part 2A brochure, copies of which are available upon request at no cost or at www.adviserinfo.sec.gov. The views expressed by the author are the author’s alone and do not necessarily represent the views of Hewins or its affiliates. The information contained in any third-party resource cited herein is not owned or controlled by Hewins, and Hewins does not guarantee the accuracy or reliability of any information that may be found in such resources. Links to any third-party resource are provided as a courtesy for reference only and are not intended to be, and do not act as, an endorsement by Hewins of the third party or any of its content or use of its content. The standard information provided in this blog is for general purposes only and should not be construed as, or used as a substitute for, financial, investment or other professional advice. If you have questions regarding your financial situation, you should consult your financial planner, investment advisor, attorney or other professional.
Amanda Liberatore
Amanda Liberatore

Marketing Copyeditor

Amanda Liberatore is the Marketing Copyeditor for Hewins Financial Advisors, based in Chicago, IL. She is the managing editor of OneBite and heads the publication's editorial staff.

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Five Important Tax Changes in 2015

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