The IRS Just Released Its Retirement Plan Limitations for 2014
- Published: 05 November 2013
As Barbara Whelehan of Bankrate.com says though, "Don't get too excited."
The contribution limits for 401(k), 403(b) and 457 workplace retirement plans remain unchanged at $17,500. For those 50 and older, catch-up contribution limits are the same at $5,500 for those 50 and older, for a total possible contribution of $23,000. This is the same as in 2013. Individual Retirement Account contributions are also the same, at $5,500 plus $1,000 for 50 and older. Nothing here to speak of really.
There are, however, changes to the IRS cost of living adjustments in 2014...
You can take a tax deduction for contributions to a traditional IRA. Taking the deduction depends on earnings and whether or not you invest in a workplace plan. How much you can deduct is adjusted incrementally when your adjusted gross income(AGI) exceeds specific dollar amount levels. These "income phase-out ranges" increased in 2014.
Here are the new limits:
- Deductions for IRAs made by single and head-of-household filers phase out for those who are covered by a workplace plan and have AGIs between $60,000 and $70,000, up from $59,000 to $69,000 in 2013. That means you get a full deduction if you earn up to $60,000, and a partial deduction if you earn up to $70,000.
- If you're married filing jointly and you contribute to a workplace plan, the income phase-out range is $96,000 to $116,000, up from $95,000 to $115,000 in 2013.
- If you're married filing jointly and your spouse contributes to a workplace plan but you do not, the income phase-out range for deductibility of contributions is $181,000 to $191,000, up from $178,000 to $188,000 in 2013.
- If you're married and filing separate returns, the phase-out range remains $0 to $10,000, the same level it's been for many years, and doesn't get a cost-of living adjustment.
Although this isn't getting a whole bunch of attention relative to everything else going on in healthcare and IRS scandal-type news, we believe it is good to notice changes like this.
Read the whole "New IRS Rules For Retirement" article written by Barbara Whelehan at Bankrate.com. Need some tax law planning or Business Law assistance? Contact us, we have experienced, certified attorneys.
- The Business Law Team
Rogers Sheffield & Campbell, LLP