EXECUTIVE SUMMARY:

The IRS has just released inflation-adjusted figures for 2014.  We’ve listed below some of the more important numbers.

Planners should note that estates of decedents who dying in 2014 will have a basic exclusion amount of $5.34 million, up from the 2013 exclusion of $5.25 million.

The annual exclusion for gifts remains at $14,000 for 2014.

FACTS FOR 2014:

Standard Deduction:   

$6,200 for singles

$6,200 for married persons filing separate returns, and $12,400 for married couples filing jointly

$9,100 for heads of household

Limitation for itemized deductions claimed on tax year 2014 returns of individuals begins with incomes of $254,200 or more ($305,050 for married couples filing jointly).

Personal Exemption: $3,950

Note:  Phase-out starts with adjusted gross incomes of $254,200 ($305,050 for married couples filing jointly).

Complete phase out of the exemption occurs at $376,700 ($427,550 for married couples filing jointly.)

Earned Income Credit: The maximum earned income credit amount is $6,143 for taxpayers filing jointly who have three or more qualifying children.

Estate Tax Exclusion: $5.34 million

Annual Exclusion for Gifts: Remains at $14,000 for 2014.

Many pension limitations (e.g. those governing section 401(k) plans and IRAs) will not change because the increase in the consumer price index didn't hit statutory thresholds.

These include:

401(k) contribution limit: $17,500

403(b) contribution limit: $17,500

457 plans (Most): $17,500

Thrift Savings Plan Limits: $17,500

The catch-up contribution limit for those aged 50 and over: $5,500.

Traditional IRA Deduction Phase-Outs:  Single individuals or heads of household who are covered by a workplace retirement plan - phased out at modified adjusted gross incomes between $60,000 and $70,000.

Workplace Retirement Plan Phase-Outs:  For married couples filing jointly, in which the spouse who makes the IRA contribution - income phase-out range is $96,000 to $116,000

IRA contributor not covered by a workplace retirement plan married to someone who is covered - deduction phased out when couple's income is between $181,000 and $191,000.

 

HOPE THIS HELPS YOU HELP OTHERS MAKE A POSITIVE DIFFERENCE! 

 

Steve Leimberg

 

CITE AS: 

LISI Estate Planning Newsletter #2157 (October 31, 2013) at http://www.LeimbergServices.com   Copyright 2013 Leimberg Information Services, Inc. (LISI).  Reproduction in ANY Form or Forwarding to ANY Person – Without Express Permission – Prohibited. 

CITES:

Rev. Proc. 2013-35; 2013-47 IRB 1; IR-2013-86