Retirement Plan Limits

The IRS updated the retirement plan limits effective for the plan year that begins on or after January 1, 2015. A comparison of the 2014 and 2015 limits is listed below.

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Social Security Tax and Wage Base

For calendar year 2015, the Social Security taxable wage base increases to $118,500 (up from $117,000 in 2014).

Medicare Tax

The regular Medicare tax rate of 1.45% remains unchanged and applies to all income without a limitation for both the employee and employer portion. However, the Affordable Care Act included an additional Medicare tax of 0.9%. The additional Medicare tax applies to wages, other compensation, and self-employment income over certain dollar thresholds ($200,000 for single and $250,000 for married filing jointly). The additional Medicare tax only applies to the employee and not the employer. Final IRS regulations require an employer to withhold the additional Medicare tax on wages or compensation it pays to an employee in excess of $200,000 in a calendar year.

Health and Fringe Benefit Plan Limits

Updated health and fringe benefit plan adjustments also apply for the 2015 calendar year. A comparison of the 2014 and 2015 limits is listed below

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