Commercial Investment Real Estate is the magazine of the CCIM Institute, the leading provider of commercial real estate education. CIRE covers market trends, current developments, and business strategies within the commercial real estate field.
Issue link: http://cire.epubxp.com/i/443516
10 January | February | 2015 Commercial Investment Real Estate IS SUE S BUSINE S S a by Mary Stark-Hood, JD, CFP 2015 Tax Law Changes As individuals and companies plan for 2015, certain tax issues must be considered in personal and business fi nancial planning. Here is a summary of changes to benefi t plan contributions. that real estate sales agents are not treated as employees for purposes of the Af ordable Care Act. T erefore, many real estate broker- age of ces may never reach the number of employees required to trigger ACA employer obligations. For individuals with health f exible spend- ing accounts, the maximum contribution has been increased to $2,550. 401(k) Contribution Limits. When the IRS announced its 2015 adjustments, it noted that many plan limits will have a cost- of-living adjustment bump-up based on the U.S. consumer price index. 401(k), 403(b), and profit-sharing plan elective deferrals rose from $17,500 to $18,000. For employees age 50 and over, the catch-up contribution limit rose from $5,500 to $6,000. T e catch-up limit applies to those turning 50 at any time during the year. Employer and employee def ned contri- bution limits rose from $52,000 to $53,000. Again, for those age 50 and over, the limit increased from $57,500 to $59,000. This ef ectively means that an employee 50 years or older can defer a total of $24,000 and the employer, through an employer match and prof t-sharing, can contribute up to $35,000. T e employee annual compensation limit for calculating contributions has also risen from $260,000 to $265,000. T e limit used in the def nition of a highly compensated employee for the purpose of 401(k) nondiscrimination testing to deter- mine if all contributions can remain intact or whether some need to be returned because the plan favors highly compensated indi- viduals has also increased from $115,000 to $120,000. The compensation of "key employees" in a top-heavy plan has remained unchanged at $170,000. Defined Benefit Plans. Significantly fewer employers maintain def ned benef t plans, but for those who do, the maximum annual benef t that may be funded remains at $210,000. For an employee who separated from service before Jan. 1, 2015, the limit for defined benefit plans is computed by multiplying the participant's compensation limit, as adjusted through 2014, by 1.0178, an increase from the prior year. SIMPLE Plans. Savings incentive match plans, or SIMPLE, retirement accounts are for employees of small companies. T e maxi- mum contribution limit has increased from $12,000 to $12,500 and those age 50 and over are allowed catch-up contributions of $3,000. SEP Plans. Simplif ed employee pensions, or SEP, plans provide small business owners with a broad range of compensation limits and allow high earners to contribute a sig- nif cant amount to retirement accounts. T e This article is sponsored by the CCIM Foundation @ www.ccimef.org. New Rules and Increased Limits Withholding Rules. Income subject to FICA payroll tax has changed for 2015. T e maximum amount of earnings subject to the Social Security tax is now $118,500, up from $117,000. According to the Social Security Administration, about 10 million workers will pay higher taxes. However, actual with- holding amounts remain unchanged at 6.2 percent, for both employees and employers, up to the taxable maximum. Patient Protection and Affordable Care Act. This law allows small employ- ers to continue to of er their current health plans to employees through December 31, 2015. In February 2014, the Internal Rev- enue Service issued regulations clarifying Temistocle Lucarelli/Thinkstock