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| Solo-k Plan |
The Internal Revenue Service announced cost‑of‑living adjustments
affecting dollar limitations for pension plans and other retirement-related
items for tax year 2014.
Highlights include the following:
· The elective deferral (contribution)
limit for employees who participate in 401(k) plans remains unchanged at
$17,500.
·
The catch-up contribution limit for
employees aged 50 and over who participate in 401(k) Plan remains unchanged at
$5,500.
·
The limit on annual contributions to an
Individual Retirement Arrangement (IRA) remains unchanged at $5,500. The
additional catch-up contribution limit for individuals aged 50 and over is not
subject to an annual cost-of-living adjustment and remains $1,000.
·
The deduction for taxpayers making
contributions to a traditional IRA is phased out for singles and heads of
household who are covered by a workplace retirement plan and have modified
adjusted gross incomes (AGI) between $60,000 and $70,000, up from $59,000 and
$69,000 in 2013. For married couples filing jointly, in which the spouse
who makes the IRA contribution is covered by a workplace retirement plan, the
income phase-out range is $96,000 to $116,000, up from $95,000 to $115,000.
For an IRA contributor who is not covered by a workplace retirement plan
and is married to someone who is covered, the deduction is phased out if the
couple’s income is between $181,000 and $191,000, up from $178,000 and
$188,000. For a married individual filing a separate return who is
covered by a workplace retirement plan, the phase-out range is not subject to
an annual cost-of-living adjustment and remains $0 to $10,000.
·
The AGI phase-out range for taxpayers
making contributions to a Roth IRA is $181,000 to $191,000 for married couples
filing jointly, up from $178,000 to $188,000 in 2013. For singles and
heads of household, the income phase-out range is $114,000 to $129,000, up from
$112,000 to $127,000. For a married individual filing a separate return,
the phase-out range is not subject to an annual cost-of-living adjustment and
remains $0 to $10,000.
The total contribution limitation for defined contribution plans is
increased in 2014 from $51,000 to $52,000.
The individual employee limitation on the exclusion for elective
deferrals remains unchanged at $17,500.
The annual compensation limit is increased from $255,000 to
$260,000.
The dollar limitation concerning the definition of key employee in
a top-heavy plan is increased from $165,000 to $170,000.
The limitation used in the definition of highly compensated
employee remains unchanged at $115,000.
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