New Increases for 2015
The Social Security Administration announced on October 22, 2014 that the wage base for computing the Social Security tax in 2015 will increase to $118,500 from $117,000, which is the current wage base for 2014.
What impact does this have on doctors? Assuming you make at least this much as a wage, you will pay an extra $93 of Social Security Tax to meet the new maximum amount o $7,347.00 per individual. Your employer will also match this amount or you will if you are the employer – so, the total additional tax amount for 2015 will be $186.
The IRS also announced many retirement plan dollar limits for 2015. Here are those that have an impact on the doctors with whom we work:
- Catch Up contributions for 401(k) and SIMPLE plans (for those age 50 and over) – increased from $5,500 to $6,000
- Defined Contribution Plans – the limit on the annual additions to a participant’s account increases from $52,000 to $53,000
- Elective deferrals for 401(k) plans – increases from $17,500 to $18,000
- Annual Compensation Limit – the maximum amount of annual compensation that be considered for purposes of a qualified plan will move from $260,000 to $265,000
- Elective deferrals for a SIMPLE plan – increases from $12,000 to $12,5000
- Simplified Employee Pensions (SEP’s) – the compensation limit for keeping employees from participating in the plan increases from $550 to $600
The IRA contribution limits remain unchanged at $5,500 per year.