News & Events


The Social Security Administration (SSA) recently issued a cost-of-living adjustment for the Social Security taxable wage limit. For tax year 2015, the maximum amount of earnings subject to the Social Security tax will increase to $118,500 ($1,500 increase from 2014). The employee and employer tax rate will remain unchanged at 6.2%. Due to the increase in the wage limit, the maximum Social Security tax payable by an employee will be $7,347 ($93 increase from 2014).

 

2015 COLA INCREASES FOR DOLLAR LIMIATIONS ON BENEFITS AND CONTRIBUTIONS

 

The Internal Revenue Service (IRS) also issued a cost-of-living adjustment regarding dollar limitations for pension plans and other retirement-related items for the 2015 tax year. The increase in the 2015 limitations results from an increase in the cost-of-living index. Significant increases are as follows: 

  • The 401(k), 403(b), and most 457 plan contribution limits increased to $18,000 ($500 increase from 2014)
  • The 401(k), 403(b), and most 457 plan catch-up contribution limits for those aged 50 and over increased to $6,000 ($500 increase from 2014)
  • The defined contribution limit increased to $53,000 ($1,000 increase from 2014)
  • The annual compensation limit increased to $265,000 ($5,000 increase from 2014)
  • The highly compensated employee threshold increased to $120,000 ($5,000 increase from 2014) 

Some of the significant benefit plan limitations that remain unchanged include the defined benefit limitation and limit on annual contributions to an individual retirement arrangement (IRA). 

 

For more information or questions on this topic, please contact your local UHY LLP professional.