The end of 2015 will be here before you know it. It’s time to start planning now for maximizing your IRA contributions. Late last year, the IRS announced its 2015 retirement plan contribution and income limitations. Some of the income limits for making contributions and taking deductions include cost-of-living increases over 2014, so it’s worth reviewing the numbers.
For 2015, the IRS limit for IRA contributions is unchanged from 2014 at $5,550. However, if you are age 50 or over by the end of the year, you can take advantage of an additional catch-up contribution of $1,000, for a total annual contribution of $6,500. Depending on your circumstances you may be able to contribute to both a traditional IRA and Roth IRA, but bear in mind that $5,500 limit ($6,500 for 50 and over) is a total across all IRA accounts.
The other major issue for most retirement savers is whether or not a contribution to a traditional IRA may be deductible. Remember, if neither you nor your spouse has an eligible retirement plan where you work, your traditional IRA contribution is fully deductible regardless of your income.
For 2015, the IRA income limits for deductible contributions have increased a bit from 2014. For single filers, your full contribution to a traditional IRA is deductible for adjusted gross incomes (AGI) up to $61,000. After that, your deduction is phased out from $61,000 to $71,000. Over $71,000 your contribution is not deductible at all. Keep reading to see if you are eligible to contribute to a Roth IRA instead.
For couples filing jointly, it gets a little more complicated depending on whether you and/or your spouse are covered by a workplace retirement plan. For couples where the contributor is covered by a retirement plan, IRA contributions are fully deductible up to an income of $98,000, with the phase out occurring between $98,000 and $118,000. If you have an AGI over $118,000, you can’t deduct contributions to a traditional IRA. If your spouse is covered by a retirement plan, but you are not, your contributions are fully deductible if your AGI is below $183,000, and phased out between $183,000 and $193,000.
While Roth IRA contributions are not deductible at any income level, they do offer tax-free withdrawals in retirement when certain conditions are met. However, only taxpayers below specific income limits may make contributions to a Roth IRA.
For married couples filing jointly, a full contribution is available for incomes below $183,000. Between $183,000 and $193,000 AGI, a reduced contribution can be made to a Roth IRA. For singles and heads of household, full contributions are allowed for AGI below $116,000, phased out between $116,000 and $131,000, and not allowed for incomes above that.
Remember that IRA contributions may be made through April 15 of the following year. So, IRA contributions for 2015 may be made through April 15, 2016.
 IRS 2015 Pension Plan Limitations (<a href="http://www our website.irs.gov/uac/Newsroom/IRS-Announces-2015-Pension-Plan-Limitations-1″ onclick=”__gaTracker(‘send’, ‘event’, ‘outbound-article’, ‘http://www.irs.gov/uac/Newsroom/IRS-Announces-2015-Pension-Plan-Limitations-1’, ‘http://www.irs.gov/uac/Newsroom/IRS-Announces-2015-Pension-Plan-Limitations-1’);”>http://www.irs.gov/uac/Newsroom/IRS-Announces-2015-Pension-Plan-Limitations-1)