by Mark Jones
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.