Tax Changes for 2014

by / Thursday, 02 January 2014 / Published in GTM Business Blog

tax changes for 2014There have been many tax changes for 2014. The following table provides some important federal tax information for 2014 (and 2013). Some of the dollar amounts change due to inflation. Other amounts are changing due to legislation. Please contact GTM with any questions you may have.

Social Security/ Medicare

2014

2013

Social Security Tax Wage Base $117,000 $113,700
Medicare Tax Wage Base No limit No limit
Employee portion of Social Security 6.2% 6.2%

Individual Retirement Accounts

2014

2013

Roth IRA Individual, up to 100% of earned income  $5,500 $  5,500
Traditional IRA Individual, up to 100% of earned Income  $5,500 $  5,500
Roth and traditional IRA additional annual “catch-up” contributions for account owners age 50 and older  $1,000 $  1,000

Qualified Plan Limits

2014

2013

Defined Contribution Plan limit on additions on Sections 415(c)(1)(A) $ 52,000 $ 51,000
Defined Benefit Plan limit on benefits (Section 415(b)(1)(A)) $210,000 $205,000
Maximum compensation used to determine contributions $260,000 $255,000
401(k), SARSEP, 403(b) Deferrals (Section 402(g)), & 457 deferrals (Section 457(b)(2)) $ 17,500 $ 17,500
401(k), 403(b), 457 & SARSEP additional “catch-up” contributions for employees age 50 and older $  5,500 $  5,500
SIMPLE deferrals (Section 408(p)(2)(A))  $12,000 $ 12,000
SIMPLE additional “catch-up” contributions for employees age 50 and older  $2,500 $  2,500
Compensation defining highly compensated employee  (Section 414(q)(1)(B))  $115,000 $115,000
Compensation defining key employee (officer)  $170,000 $165,000
Compensation triggering Simplified Employee Pension contribution requirement (Section 408(k)(2)(c))  $    550 $    550

Driving Deductions

2014

2013

Business mileage, per mile 56
cents
56.5
cents
Charitable mileage, per mile 14 cents 14 cents
Medical and moving, per mile 23.5 cents 24 cents

Business Equipment

2014

2013

Maximum Section 179 deduction $  25,000* $500,000
Phase out for Section 179 $200,000* $2
million

Transportation Fringe Benefit Exclusion

2014

2013

Monthly commuter highway vehicle and transit pass  $  130** $   245**
Monthly qualified parking  $  250 $   245

Standard Deduction

2014

2013

Married filing jointly  $ 12,400 $ 12,200
Single (and married filing separately)  $  6,200 $  6,100
Heads of Household  $  9,100 $ 8,950

Personal Exemption

2014

2013

Amount $ 3,950 $3,900***

Domestic Employees

2014

2013

Threshold when a domestic employer must withhold and pay FICA for babysitters, house cleaners, etc. $  1,900 $ 1,800

Kiddie Tax

2014

2013

Net unearned income not subject to the “Kiddie Tax” $  2,000 $  2,000

Estate Tax

2014

2013

Federal estate tax exemption $5.34 million $5.25
million
Maximum estate tax rate 40% 40%

Annual Gift Exclusion

2014

2013

Amount you can give each recipient $ 14,000 $ 14,000

* The Section 179 amounts are scheduled to go down dramatically unless Congress acts to extend them. The amounts have been increased in recent years by various tax laws.

** The American Taxpayer Relief Act provided a retroactive increase from the $125 limit that had been in place for 2012. If Congress does not act, the amount will go down to $130 for 2014.

*** The exemption is subject to a phase-out that begins with adjusted gross incomes of $250,000 ($300,000 for married couples filing jointly). It phases out completely at $372,500 ($422,500 for married couples filing jointly.)

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