Update: IRS Announces 2014 Pension Plan Limitations

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The IRS has recently announced the cost-of-living adjustments for pension plans and other retirement-related items for 2014. We have highlighted a few key items.

The following items will remain unchanged:

  • The elective deferral (contribution) limit for 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan.
    • Employees: $17,500
    • Catch-up for employees 50 and over: $5,500

  • The limit on annual contributions to an Individual Retirement Arrangement (IRA).
    • Individuals: $5,500
    • Catch up for individuals 50 and over: $1,000

The following items will increase:

  • The adjusted gross income (AGI) phase-out range for deductions for taxpayers making contributions to a traditional IRA:
    • Singles and heads of household who are covered by a workplace retirement: $60,000 and $70,000 (up from $59,000 and $69,000)
    • For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan: $96,000 to $116,000 (up from $95,000 to $115,000).
    • An individual who is not covered by a workplace retirement plan and is married to someone who is covered: $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:
    • Married couples filing jointly: $181,000 to $191,000 (up from $178,000 to $188,000)
    • For singles and heads of household: $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 AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is:
    • $60,000 for married couples filing jointly (up from $59,000)
    • $45,000 for heads of household (up from $44,250)
    • $30,000 for married individuals filing separately and for singles (up from $29,500)

If you have any questions on these changes, contact your AHP professional.


Any accounting, business, or tax advice contained in this communication, including attachments and enclosures, is not intended as a thorough analysis of specific issues, nor a substitute for a formal opinion, nor was it written to be used to avoid tax related penalties.