Posts Tagged ‘cost of living’

The Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other tax benefits for Tax Year 2012.  The highlights include: 

• 401(k), 403(b) and most 457 plans elective deferral increased from $16,500 to $17,000 (Catch-up contribution limit for those aged 50 and over remains unchanged at $5,500) 
• Defined benefit plan limitation increased from $195,000 to $200,000 
• Limitation for defined contribution plans increased from $49,000 to $50,000 
• The definition of a highly compensated employee is increased from $110,000 to $115,000 
• The definition of a key employee in a top-heavy employee benefit plan is increased from $160,000 to $165,000 in compensation
• Personal and dependent exemption increased from $3,700 to $3,800 
• Standard deduction for married filing a joint return increased from $11,600 to $11,900 
• Standard deduction for singles and married filing separately increased from $5,800 to $5,950 
• Standard deduction for heads of household increased from $8,500 to $8,700 
• The foreign earned income deduction increased from $92,900 to $95,100 
• Exclusion from estate tax amount increased from $5,000,000 to $5,120,000 (The annual exclusion for gifts remains unchanged at $13,000) 
• Standard Continental United States  per diem rate increased to $123 ($77 lodging, $46 meals and incidental expenses) 

New business, medical and charity mileage rates have not been released as of this writing.