On October 31, 2013, the IRS released their cost-of-living adjustments (“COLA”) that will affect dollar limitations for pension plans and other retirement-related items for the 2014 tax year. The IRS determines the COLA rates based on the changes in the Consumer Price Index. Based on this change, some limitations such as, the elective deferral and 401(k) plan catch-up contributions, will remain unchanged, while other thresholds have increased. For a comparison of the 2013 and 2014 retirement plan limits, see the tables below:
401(k), 403(b) and Profit Sharing Plans 2014 2013
401(k) Elective Deferrals $17,500 $17,500
Catch-up contributions (age 50 and older) $5,500 $5,500
Defined contribution maximum deferral (employee and employer contributions) $52,000 $51,000
Employer annual compensation limit $260,000 $255,000
Annual compensation of “key employees” in a plan designated as top-heavy $170,000 $165,000
Annual compensation of “highly compensated employee” in a plan designated as top-heavy $115,000 $115,000
IRAs 2014 2013
IRA Contribution Limit $5,500 $5,500
IRA Catch-up Contribution $1,000 $1,000
IRA AGI Deduction Phase-Out (starting at):
Joint Return $96,000 $95,000
Single or Head of Household $60,000 $59,000
For further information please contact our office.
By: Kristin Metzger, CPA
