American IRA CEO, Jim Hitt
The IRS announces higher 2015 401k contribution limits. The elective deferral and total contributions have increased for 2015 for the one participant plans.
Charlotte, NC (PRWEB) October 25, 2014
The 2015 401k contribution limits have increased for the one-participant 401(k) plan. What some people don't realize is that the one-participant plan is the official name given to it by the IRS though most people sometimes called it a: Solo 401(k), Solo-k, Uni-k, or One-participant k.
As stated by the IRS, the one-participant 401(k) plan isn't a new type of 401(k) plan. It's a traditional 401(k) plan covering a business owner with no employees, or that person and his or her spouse. These plans have the same rules and requirements as any other 401(k) plan.
Here are the 2015 401K contribution limits for the one-participant 401(k) plan as outline by the IRS:
The business owner wears two hats in a 401(k) plan: employee and employer. Contributions can be made to the plan in both capacities. The owner can contribute both:
Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit: $17,500 in 2014 and $18,000 in 2015, or $23,000 in 2014 and $24,000 in 2015 if age 50 or over; plus
Employer non-elective contributions up to 25% of compensation as defined by the plan, or for self-employed individuals, see discussion below
Total contributions to a participant’s account, not counting catch-up contributions for those age 50 and over, have increased from $52,000 for 2014 to $53,000 for 2015.
Click here to visit the IRS website for additional details.
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