401k and IRA Contribution and Deduction Limits for 2014 & 2015

The IRS recently released the new 2015 401k and IRA contribution and deduction limits. While 401k limits had remained flat since the last increase in 2012, they are going up again in 2015.  401k and catch-up contribution limits are all increasing.  Limits for IRA contributions, however, are not going up. Here are the detals.

401(k) Contribution Limits

As announced by the IRS, the contribution limit for 401(k) accounts will increase from $17,500 to $18,000 in 2015.  Those 50 or older also get an increase, with the catch-up contribution increasing $500 from $5,500 to $6,000.  That brings the total contribution limit to $24,000 for those who qualify.

Tax YearRegular Contribution LimitCatch-up Contribution Limit for those 50 & older
2015$18,000$6,000
2014 $17,500$5,500
2013$17,500$5,500
2012$17,000$5,500
2011$16,500$5,500
2010$16,500$5,500
2009$16,500$5,500
2008$15,500$5,000
2007$15,500$5,000
2006$15,000$5,000

IRA Contribution and Deduction Limits

With a deductible IRA, it’s important to understand both the contribution limits and the income limits to qualify for the deduction. While you can always contribute up to the $5,500 contribution limit (as of 2015), you’ll only be able to deduct your contribution on your federal taxes if you fall into contribution limits.

It’s important to understand both contribution and deduction limits when you’re deciding how much to contribute to an IRA in any given year.

IRA Contribution Limits

The maximum contribution in 2015 is still $5,500. The catch-up contribution for those 50 and older remains $1,000; the catch-up contribution for an IRA is not indexed for inflation.  Here are the IRA contribution limits over the last several years:

Tax YearRegular Contribution LimitCatch-up Contribution Limit for those 50 & older
2015$5,500$1,000
2014$5,500$1,000
2013$5,500$1,000
2012$5,000$1,000
2011$5,000$1,000
2010$5,000$1,000
2009$5,000$1,000
2008$5,000$1,000
2007$4,000$1,000
2006$4,000$1,000

Deductible IRA Income Limits

Now on to the question of whether your IRA contribution is deductible. Whether your IRA contribution is deductible depends on three factors: (1) your filing status, (2) your adjusted gross income, and (3) whether you are covered by a retirement plan at work.

Below are listed the phase out ranges based on the above factors for both 2014 and 2015. If your AGI is less than the bottom of the applicable range, your IRA contribution is fully deductible. If your AGI falls within the range, your contribution is partially deductible. And if your AGI is above the range, then your contribution is not deductible.

2014

If you are covered by a workplace retirement plan, your phase out range is as follows:

  • Singles and heads of household: $60,000 to $70,000
  • Married couples filing jointly: $96,000 to $116,000 (if the person making the IRA contribution is covered by a workplace retirement plan)
  • Married couples filing separately: $0 to $10,000

If you are not covered by a retirement plan at work, your phase out range is as follows:

  • Married couples filing jointly: $181,00 to $191,000 (if your spouse is covered by a workplace retirement plan)

2015

If you are covered by a workplace retirement plan, your phase out range is as follows:

  • Singles and heads of household: $61,000 to $71,000
  • Married couples filing separately: $98,000 to $118,000 (if the person making the IRA contribution is covered by a workplace retirement plan)
  • Married couples filing separately: $0 to $10,000

If you are not covered by a workplace retirement plan, your phase out range is as follows:

  • Married couples filing separately: $183,00 to $193,000 (if your spouse is covered by a workplace retirement plan)

Other Limits

If you are a single or head of household filer and are not covered by a retirement plan at work, you can take the full deduction up to the year’s contribution limit, regardless of your income.

If you’re married filing jointly or separately, and neither spouse is covered by a work-based retirement plan, you can take the full deduction up to your contribution limit, regardless of income.

(Note: If you’re interested in a Roth IRA, those income limits have changed as well. You can get the scoop on 2014 and 2015 Roth IRA limits here.)

SEP IRAs and Solo 401(k)s

Self-employed individuals and small business owners have much higher contribution limits: $52,000 per year in 2014 and $53,000 per year in 2015. This is the amount that a self-employed individual or small business owner can contribute as a percentage of his or her income.

The table below shows historical changes in SEP IRA and Solo 401(k) contribution limits. The 2015 compensation limit for these accounts is $265,000 – up from $260,000 in 2014.

The table below shows these historical changes:

Tax YearCompensation LimitContribution Limit
2015$265,000$53,000
2014 $260,000$52,000
2013$255,000$51,000
2012$250,000$50,000
2011$245,000$49,000

To learn more about SEP IRAs and Solo 401ks, check out this article.

Published or Updated: October 31, 2014
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

Comments

  1. Long says:

    Just a note that if you are disqualified from contributing to a Roth IRA because of income limits, you can always open a non-deductible Traditional IRA and convert it immediately to a Roth.

    I’ve been doing it for the past 3 years because of income limitations and plan to do it again in 2013. Keeping my fingers crossed that lawmakers don’t close the loophole, or get some sense in their heads and just lift the income limits.

  2. Long says:

    Just a note that if you are disqualified from contributing to a Roth IRA because of income limits, you can always open a non-deductible Traditional IRA and convert it immediately to a Roth.

    I’ve been doing it for the past 3 years because of income limitations and plan to do it again in 2013. Keeping my fingers crossed that lawmakers don’t close the loophole, or get some sense in their heads and just lift the income limits.

  3. Bianca says:

    I am aware there are limits for both 401(k) and IRA plans. I am a federeal government employee and have the Thrift Savings Plan. I am thinking about opening an IRA to contribute more money towards retirement. IRA’s are more flexible in what you want to contribute to as compared to 401(k)’s and my dreaded TSP. The only reason I am even keeping my TSP is because my employer matches up to 5%. I figure free money is free money.

    My question is what is the limit on contributions if you have both accounts? I read somewhere that you have to consider both or you will be penalized for over contributing.

  4. Bianca says:

    I am an employee of the federal government and have a Thrift Savings Plan. I have been thinking about additionally opening an IRA because of the flexibility of what you can invest in. 401(k)’s are limited and the TSP is even worse. The only reason I am sticking with it is because my employer matches up to 5%.

    I would like to know what the contribution limitations are when you have one of each. My guess is that you cannot do the full contribution for both.

    • Long says:

      Bianca,

      The limit for the TSP is the same as a 401k ($17,000 this year, $17,500 for 2013) and the limit for an IRA is $5,000 this year, and $5,500 in 2013. The amounts are independent of each other.

      If I were you, I would contribute more to the TSP. The funds are managed by Blackrock – they have great returns and low fees. Low fees are surprising for funds run by Blackrock, but they must have some kind of deal in place for the government. Makes me wish I were still in the Army.

  5. Jim says:

    If you refer to your 401k Contribution table, you indicate in years 2009 through 2011 that the Catch-Up Contribution limit was $5,500. Is this correct?

    • Rob Berger says:

      Yes, I believe it is.

      • Jim says:

        So then, it dropped back down to $5,000 in 2012? (referencing the 401k table in this article)

        • Rob Berger says:

          Jim, you are absolutely correct. Good catch. I’ve updated the table.

  6. Kenneth says:

    Rob, in the IRA contributions section, for both 2014 and 2015, you mention “Married Couples Filing Jointly” twice, the first instance of each should be “filing separately” I believe.

    • Rob Berger says:

      Kenneth, actually those both should be filing separately. One is when the spouse making the contribution is covered by a workplace plan. The other is when the spouse making the contribution is NOT covered by a plan, but his or her spouse is.

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