The Internal Revenue Service, better known as the IRS, has just recently released its new and greater supplement limits for several tax-yielded investment plans in the 2015 tax year. For those investors that have seen stalled earning increases up to this point, the news of increased 2015 contribution limits should be very good news. The fresh 2015 contribution limits also bring along raises in the greatest allowed income stages for those capitalists looking to write off deductions. The 2015 contribution limits are a welcome development, and both advisors and investors alike should make themselves familiar with the new modifications that are now in place. For more information on the 2015 contribution limits, keep following along!
Most Notable Changes
The most important detail an advisor should drill into their clients’ consciousness is the fact that the IRS has raised the annual sum of money you can contribute to your 401(k) and 403(b) accounts, most 457 plans and the government’s Thrift Savings Plan. The yearly allowable amount has increased from $17,500 to $18,000 and the 2015 contribution limits were decided upon to stay in step with the rising costs of living.
Advisors should make their clients in their 50s and up aware of these changes so they can continue to save more money even more efficiently as they inch closer to their retirement age. There’s also an additional perk out there associated with people in the 50 and older age range which is known as the “catch-up” addition. Those heading into senior citizen territory at the age of 50 can now contribute as much as $6,000 to their retirement investment plan annually, which can mean as much as $24,000 in your savings account. Growing from $5,500 in 2014, it’s surprising just how quickly this little extra bit can add up and do so much for one’s life post-retirement.
New, Improved Phase-Out Principles
In the scope of 2015 contribution limits, the deduction for taxpayers to an IRA account is positioned for single folks and household heads that have modified adjusted gross incomes between $61,000 and $71,000 which illustrates a small increase from the $60,000 to $70,000 2014 figures. For married couples that file jointly, the spouse that makes the IRA contribution and is covered by a workplace retirement plan has an income phase-out range of $98,000 to $118,000 which is up from the $96,000 base limit of 2014.
Well Off Clients Will Be Happy Too
Advisors will also be glad to know that they can give their most affluent clients some good news! The Retirement Savings Contributions Credit or Saver’s Tax Credit is a credit that’s traditionally intended for low and average income households but now, families with higher net worth might be able to reap some of the benefit as well. This credit usually applies for married couples that choose to file together and show an income of up to $61,000.
Different income stages are set for single folks and married couples that are filing separately.
The clients that contribute as much as $5,000 to an IRA will get the tax-yielded investments attached to their contribution as well as a tax credit that will cut back their payable assets by a percentage depending on where their asset level is.
Although this benefit was originally designed to help low and mid-income employees, it has the potential to help people from many different walks of life.
Even though higher income earners won’t be able to get tax breaks from their IRA additions, giving the highest offering possible will still keep you in the best state: and all investors should take that advice. An advisor should be able to get a smile out of all of their clients since capitalists of any asset group will prosper from the tax-yielded advancement of their investments. They can also get in on the advantages of the tax breaks that come from converting their IRA plans to a Roth IRA contribution plan instead.
The 2015 contribution limits have certainly got everyone thinking about the year ahead and how to stay in good step with the Internal Revenue Service. Whenever you have a client walking in or you’re heading out to a meeting with your advisor, make sure you get fully briefed on the 2015 contribution limits. To be best prepared for another tax year, make sure you know all the rules and regulations on the books to get things started off right. You want this year to be one of sound solid ground and financial strength, so make sure to do whatever it takes to get whipped into shape! Make the most of the New Year and make your finances work harder.