2014 IRS Amounts and Great Change to Flexible Spending Accounts

The IRS released its list of updated 2014 deductions and limitations, which are adjusted annually for inflation.

  • Standard deductions
    • Married Filing Joint: $12,400
    • Single and Married Filing Separately: $6,200
    • Head of Household: $9,100
  • Personal exemption: $3,950
  • Maximum 401(K) deferral: $17,500 or $23,000 if over age 50 (same as 2013)
  • Maximum combined employer and employee contribution to a 401(K) plan: $52,000
  • The maximum wages subject to Social Security Taxes is $117,000.

In addition, the IRS relaxed it’s “use it or lose it” rules for Flexible Spending Accounts.  If employers make the change to their plan, employees will be able to carry over up to $500 to cover expenses in the next year.  This is a great change that can allow some flexibility for employees who won’t need to scramble to use their funds by year’s end.