401 k plan limits 2015 Guide for Individuals and Businesses

For individuals, the 2015 contribution limit to a 401(k) plan was $17,500, with an additional $5,500 catch-up contribution allowed for those 50 and older.

You can contribute up to 25% of your income to a 401(k) plan, but the total contribution limit is $17,500.

Businesses with a 401(k) plan can also benefit from the 2015 limits, as they are required to contribute at least 3% of their employees' salaries to the plan.

Employers can also match their employees' contributions up to 6% of their salary, but this is optional.

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In 2015, the IRS increased the 401(k) contribution limits to $18,000, a $500 increase from the previous year.

The catch-up contribution limit for employees aged 50 and over is $6,000, a $500 increase from 2014.

The maximum compensation used to determine contributions is $265,000, a $5,000 increase from 2014.

The SIMPLE deferrals limit is $12,500, a $500 increase from 2014.

The compensation defining highly compensated employee is $120,000, a $5,000 increase from 2014.

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The compensation defining key employee (officer) is $170,000, which remained the same as 2014.

The compensation triggering Simplified Employee Pension contribution requirement is $600, a $50 increase from 2014.

The maximum combined contribution limit for one participant 401(k) plans from employers and employees together is $59,000 for employees aged 50 and older.

The maximum allowable amount that an employee can contribute to an employer-sponsored health care FSA is $2,550, a $50 increase from 2014.

The maximum allowed contribution amount for individuals to a Health Savings Account will increase by $50 for 2015 going from $3,300 to $3,350.

The maximum contribution to a 401(k) plan when taking into account employee contributions, employer matching and other contributions is $53,000 or 100% of their compensation, whichever is less.

Here's a table showing the 401(k) catch-up contribution limits for 2015 and beyond:

Employer contributions to your 401(k) plan are a great perk, but it's essential to understand the limits.

Employers often match a percentage of your contributions, up to a certain percentage of your income, such as 50% of your contributions up to 6% of your salary. Certain employers may also cap how much you can contribute to the company's 401(k) plan, especially for highly compensated employees making above $120,000 in 2015.

Don't worry, your employer's contributions won't affect your own contribution limits. The limits for employer and employee contributions are separate, and won't impact each other. This means you can still contribute up to $18,000, plus any catch-up contributions if you're over 50, even if your employer is making contributions for you.

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The self-employed have far more complex one participant 401k contribution limits, roughly 18.6% of net profit.

Contributing to a one participant 401k can be a great way for self-employed individuals to save for retirement, but figuring out the contribution limits can be a challenge. Self-employed people can use the worksheets in IRS Publication 560 to calculate their one participant 401k contribution limits if they can't afford an accountant.

For self-employed individuals, the contribution limit is net profit minus half the self employment tax minus the 401k contribution. This math can get circular, making it hard to figure out the contribution limit without some help.

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Employers often contribute a percentage match to your 401(k) contributions, up to a certain percentage of your income. For example, they may match 50% of your contributions, up to 6% of your salary.

Certain employers will cap how much you can contribute to the company's 401(k) plan, especially for highly compensated employees making above $120,000 in 2015.

Highly compensated employees might be subject to additional limits in their company's 401(k) plan, but this can vary depending on the company's specific plan.

Just make sure to check with your 401(k) plan administrator to find out what your plan's limitations are, as they may be different from the government limits.

The limits for employer and employee contributions are separate and don't affect each other, which means you can contribute more if your employer is making contributions for you.

If your employer contributes 50% of the first 6% of your income, you could potentially have a total of $21,000 in your 401(k) account, including your own contributions.

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