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Showing posts with label IRA deduction. Show all posts
Showing posts with label IRA deduction. Show all posts

IRS Releases 2014 Retirement Plan Limits

Many of the retirement plan annual limits are indexed for inflation. IRS has just released the plan limits for 2014. We look at those limits in some detail below.

Contribution Limits
IRA contributions are unchanged at $5,500. Catch-up contributions remain at $1,000.
Plan deferral limits are unchanged at $17,500. Catch-up contributions remain at $5,500.
The SEP contribution limit is now 25% of $260,000.
SIMPLE deferrals are unchanged at $12,000. Catch-up contributions remain at $2,500.

IRA Deductibility
Any individual with earned income who has not reached the year they turn 70 ½ can make an IRA contribution. However, if they are covered by an employer plan or if their spouse is covered by a plan, they may not be able to deduct that IRA contribution.

Single - The ability to deduct a contribution now phases out between $60,000 - $70,000.
Married filing jointly - Deductibility now phases out between $96,000 - $116,000 when the contributor is the one covered by the plan. Deductibility now phases out between $181,000 - $191,000 when the spouse of the contributor is the one covered by the plan.
Married filing separate - The limit remains between $0 - $10,000.

Roth IRA Contribution Income Limits
Not everyone can make a Roth IRA contribution. Unlike an IRA, a Roth contribution can be made at any age. However, the individual must have earned income, but that income cannot exceed certain limits.

Single - The ability to make a Roth contribution now phases out between $114,000 - $129,000.
Married filing jointly - The ability to make a Roth contribution now phases out between $181,000 - $191,000.
Married filing separate - The limit remains between $0 - $10,000.

- By Beverly DeVeny and Jared Trexler

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