The IRS recently announced the 2014 retirement plan contributions limits. The only significant changes in contributions amounts were for SEP IRAs Defined Benefit Plans. SEP IRA annual maximum contributions increase in 2014 from $51,000 to $52,000. Defined Benefit contributions increase in 2014 from $205,000 to $210,000.
Contributions limits for Roth and Traditional IRAs remain unchanged with annual contribution limits of $5,500 and an additional $1,000 for those 50 and older. Also unchanged are 401(k) employee contributions which remain at $17,500 annually with an additional $5,500 for those 50 and older.
On the HSA and FSA fronts there are two major changes for 2014. First, amounts placed into an FSA (flexible spending accounts) can now roll over from year to year. Previously, amounts placed in a FSA were subject to a use it or lose type system. HSA contribution limits increase in 2014 for individual accounts from $3,250 to $3,300 and for family accounts from $6,450 to $6,550.
All of these accounts provide tax advantageous ways for an individual to either save for retirement or to pay for their medical expenses. If you’re looking for tax deductions, you should determine which of these accounts is best for you. Keep in mind there are qualification and phase out rules that apply so make sure you are getting competent advice about which accounts should be set up in your specific situation.
By: Mat Sorensen
