November 1, 2013
By Larry Grudzien
Yesterday, the Internal Revenue Service announced in Revenue Procedure 2013-35 the annual inflation adjustments for more than 40 tax provisions for 2014, including the tax rate schedules, and other tax changes. This Revenue Procedure provides details about these annual adjustments.
There are several benefit limitations for 2014 included:
* The annual dollar limit on employee contributions to employer-sponsored healthcare flexible spending arrangements (FSA) remains unchanged at $2,500.
*The amount for the adoption credit or the amount excluded for adoption assistance allowed for an adoption of a child with special needs is $13,190.
*The dollar amount for employee health Insurance expense of small employers is $25,400.
*The monthly limitation for qualified transportation fringe benefit regarding the aggregate fringe benefit exclusion amount for transportation in a commuter highway vehicle and any transit pass is $130. The monthly limitation regarding the fringe benefit exclusion amount for qualified parking is $250.
*The limitations regarding eligible long-term care premiums includible in the term “medical care,” are as follows:
Attained Age Before the Close of the Taxable Year Limitation on Premiums
40 or less $370
More than 40 but not more than 50 $700
More than 50 but not more than 60 $1,400
More than 60 but not more than 70 $3,720
More than 70 $4,660
*For Medical Savings Accounts, the term “high deductible health plan” means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,200 and not more than $3,250, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,350.
*For Medical Savings Accounts, the term “high deductible health plan” means, for family coverage, a health plan that has an annual deductible that is not less than $4,350 and not more than $6,550, and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,000.
For a copy of Revenue Ruling 2013-35, please click on the link below: