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Employee Benefit Plan and IRA Limits for 2014

•    The 401(k), 403(b), and certain 457 plan elective deferral limits in 2014 will remain at $17,500; the catch-up contribution limit will stay at $5,500.

•    The annual defined contribution limit from all sources under Code Section 415(c) will rise to $52,000 from $51,000.

•    The maximum amount of employee compensation that can be considered in calculating contributions to defined contribution and defined benefit plans will increase to $260,000 from $255,000.

•    The limit used in the definition of ”key employee” for purposes of certain nondiscrimination tests and determining whether a plan is top-heavy will increase to $170,000 from $165,000.

•    The limit used in the definition of a highly compensated employee for the purpose of 401(k) and other nondiscrimination testing remains unchanged at $115,000.

•    For SIMPLE (Savings Incentive Match Plan for Employees of Small Employers) retirement accounts, the maximum contribution limit will remain $12,000; the catch-up contribution limit will also stay the same, at $2,500.

•    For simplified employee pensions (SEPs), the minimum compensation amount will remain $550, while the maximum compensation limit will increase to $260,000 from $255,000.

•    Individual retirement account (IRA) annual contribution limit will stay at $5,500. The additional catch-up contribution limit for those who are age 50 and over will remain $1,000.

•    The deduction for taxpayers making contributions to a traditional IRA has been phased out for singles and heads of household, who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGIs) from $60,000 to $70,000 – up from $59,000 to $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 AGI phase-out range will be $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 has been phased out for couples with an AGI from $181,000 to $191,000, up from $178,000 to $188,000.

•    For a Roth IRA the AGI phase-out range for taxpayers making contributions will be $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 will be $114,000 to $129,000, up from $112,000 to $127,000. For a married individual (filing a separate return) who is covered by a retirement plan at work, the phase-out range will remain $0 to $10,000.

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