It’s time again for the federal government to announce next year’s rates and limits for various federal programs. Some of those most applicable to ministries and their employees are:
- The IRS limit for elective deferral (contribution) limit for employees who participate in 401(k) or 403(b) plans will increase from $17,000 to $17,500. Read the full announcement from the IRS.
- The IRS limit for employees aged 50 and over who participate in 401(k) or 403(b) plans will remain unchanged at $5,500.
- The federal per diem rates for reimbursing staff for lodging, meals, and incidentals are listed by city or zip code at the U.S. General Services Administration website.
- Vehicle mileage reimbursement rates will continue at $0.55.5 per mile; the rate is expected to be revisited mid-2013.
- The foreign earned income exclusion rises to $97,500 from $95,100.
Notable tax changes that are set to expire or change in 2013 (unless they’re changed) include:
- Employee contributions to FSAs (flexible spending accounts) will be limited to $2500 annually.
- The reduced FICA payroll tax withholding of 4.2% on employees, which has been in effect for the past two years, is set to expire. The new rate will revert to 6.2%.
- Medicare tax rates are set to increase by 0.9% for all eligible earnings in January 2013 for higher income taxpayers.
As always, consult the IRS website for up-to-date information and changes.