Our Services are at
NO COST TO YOU!
Up to 50% off of Workers Compensation
BOSC is 'Your' Un-biased Trusted Advisor
State Unemployment Rates as low as 1.50%
Home of the "PEO Hybrid" Solution
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Our Services are at
NO COST TO YOU!
Up to 50% off of Workers Compensation
BOSC is 'Your' Un-biased Trusted Advisor
State Unemployment Rates as low as 1.50%
Home of the "PEO Hybrid" Solution
|
|
Retirement Plan Limits Announced for 2014
The IRS has announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2014. Highlights include:
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. Additional information on the adjusted and unchanged limitations is available in the IRS cost-of-living adjustment table. Changes to "Use-or-Lose" Rule for Health FSAs According to new agency guidance, employers may now allow employees to carryover up to $500 of unused amounts in a health flexible spending arrangement (FSA) to use in the following plan year. Use-or-Lose The "use-or-lose" rule requires that amounts in an employee's health FSA that are not spent by the end of a plan year be forfeited. However, an employer's cafeteria plan can provide for a grace period, whereby an employee is permitted to use amounts remaining from the previous year to pay expenses incurred for certain qualified benefits during the period of up to 2 1/2 months immediately following the end of the plan year. New Guidance Details Changes The agency guidance explains that an employer may, at its option, amend its cafeteria plan document to provide for a carryover to the immediately following plan year of up to $500 of any amount remaining unused as of the end of the plan year in a health FSA. The carryover may be used to pay or reimburse medical expenses under the health FSA incurred during the entire plan year to which it is carried over. The carryover of up to $500 does not count against or otherwise affect the indexed $2,500 salary reduction limit applicable to each plan year. A cafeteria plan that incorporates the carryover provision may not also provide for a grace period in the plan year to which unused amounts may be carried over. An employer may adopt this carryover provision to health FSAs for the current cafeteria plan year and/or subsequent plan years by amending the plan document in the manner and within the time frames described in the agency guidance.
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