As each year rolls into the next, many Texas residents and business owners begin planning, organizing and setting goals. While you consider financial goals and actions for 2015, it may be helpful to keep some new tax law changes in mind.
In 2015, the Internal Revenue Service provides for higher income limits before tax benefits are phased out when contributing to an Individual Retirement Account or Roth IRA. Individuals who make more than $61,000 and less than $71,000 experience a phase out of tax deductions when contributing to an IRA; if you are married, the phases out occurs with a joint income between $98,000 and $118,000. The income limits for contributing to a Roth IRA have been increased by $2,000 in 2015.
Taxpayers can contribute more to eligible retirement plans in 2015, though. The new rules let you contribute as much as $18,000 annually to 457, 403b or 401k plans sponsored by employers. IRA rollovers, however, will be limited. Starting on Jan. 1, investors are only allowed a single rollover in a 12-month period without early withdrawal and excessive contribution fees and taxes.
A change in rules regarding Health Flexible Spending Accounts may impact those who rely on them to cover out-of-pocket medical expenses. In previous years, you were allowed to carry over $500 in an FSA from one year to the next, but doing so in 2015 could reduce your ability to participate in the plan.
Tax changes are often surprising or complex, making them difficult for individuals and small business owners to keep up with. Not understanding a nuance in tax changes could greatly impact your finances; seeking professional assistance might reduce your risks of errors.
Source: Investopedia, “Five Tax Law Changes In 2015 You Need To Know” Jan. 02, 2015