The IRS released Revenue Procedure 2012-41 last week, announcing the inflation-adjusted amounts for a wide range of items for calendar year 2013.
Of particular note are the minimum and maximum deductible amounts and maximum out-of-pocket amount for high deductible health plans for individuals who maintain a Medical Savings Plan. For self-only coverage, the deductible cannot be lower than $2,150 and cannot be higher than $3,200; the maximum out-of-pocket expenses to be paid is $4,300. For family coverage, which is any coverage other than self-only, the deductible cannot be lower than $4,300 and cannot be higher than $6,450; the maximum out-of-pocket expenses to be paid is $7,850.
The annual gift tax exclusion for 2013 is increasing to $14,000.
The IRS also issued a news release last week announcing 2013 pension plan contribution limits.
- The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is increased from $17,000 to $17,500.
- The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan remains unchanged at $5,500.
- The limit on annual contributions to an IRA rises to $5,500, up from $5,000 in prior years.
- The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have adjusted gross incomes between $59,000 and $69,000, up from $58,000 and $68,000 in 2012. For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $95,000 to $115,000, up from $92,000 to $112,000. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $178,000 and $188,000, up from $173,000 and $183,000.
- The adjusted gross income phase-out range for taxpayers making contributions to a Roth IRA is $178,000 to $188,000 for married couples filing jointly, up from $173,000 to $183,000 in 2012. For singles and heads of household, the income phase-out range is $112,000 to $127,000, up from $110,000 to $125,000. For a married individual filing a separate return who is covered by a retirement plan at work, the phase-out range remains $0 to $10,000.
The 2013 inflation adjusted amounts for Health Savings Accounts was previously issued in Revenue Procedure 2012-26. For 2013, the annual contribution limit for an individual with self-only coverage is $3,250; the limit for an individual with family coverage is $6,450. The catch-up contribution for individuals age 55 or over remains unchanged at $1,000. To be an eligible individual for 2013, the high deductible health plan must have a minimum deductible of $1,250 for self-only coverage and $2,500 for family coverage. Additionally, the annual out-of-pocket expenses cannot exceed $6,250 for self-only coverage and $12,500 for family coverage.