The IRS has released 2014 cost-of-living adjustments for many tax-related items. Here are some highlights:
– The 401(k) and 403(b) contribution limit remains unchanged at $17,500, as does the catch-up contribution limit for employees age 50 or older ($5,500).
-The IRA contribution limit remains unchanged at $5,500, as does the catch-up contribution limit for individuals age 50 or older ($1,000).
-The limitation for itemized deductions claimed on tax year 2014 returns of individuals begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).
-The personal exemption rises to $3,950.
-The standard deduction rises to $6,200 for singles and married persons filing separate returns and $12,400 for married couples filing jointly, up from $6,100 and $12,200, respectively, for tax year 2013. The standard deduction for heads of household rises to $9,100, up from $8,950.
-The tax rate of 39.6 percent affects singles whose income exceeds $406,750 ($457,600 for married taxpayers filing a joint return), up from $400,000 and $450,000, respectively.
-The Alternative Minimum Tax exemption amount for tax year 2014 is $52,800 ($82,100, for married couples filing jointly).
-Estates of decedents who die during 2014 have a basic exclusion amount of $5,340,000, up from a total of $5,250,000 for estates of decedents who died in 2013.
-The annual exclusion for gifts remains at $14,000 for 2014.
-The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) remains unchanged at $2,500.
-The foreign earned income exclusion rises to $99,200 for tax year 2014, up from $97,600, for 2013.