The Internal Revenue Service (IRS) has issued its new cost-of-living adjustments for the year 2016. These tax limits are adjusted annually according to various economic data and benchmarks. They should be taken carefully into account when doing your tax planning for the new year, whether as an individual or organization. Limits for 2016 have largely stayed the same as 2015. Click here for the complete table of 2016 tax limits.
Here are the new limits for 2016 and the current year:
| 2016 | 2015 | |
| 401(k) deferral limits | $18,000 | $18,000 |
| Catch-up Contribution to Qualified Plans | $6,000 | $6,000 |
| Highly compensated employee | $120,000 | $120,000 |
| Annual compensation limit | $265,000 | $265,000 |
| Social Security taxable wage base | $118,500 | $118,500 |
| Section 415 limit | $53,000 | $53,000 |
| Traditional IRA limits | $5,500 | $5,500 |
| Catch-up Contribution to IRAs | $1,000 | $1,000 |
| Healthcare flexible spending account | TBA* | $2,550 |
| Mileage reimbursement | TBA** | $0.575/mile |
*Expected to stay the same
**Mileage rates will be announced in December