COLAs for 2014

Cost-of-living adjustments, or COLAs, apply to nearly four dozen tax rules, and the IRS has announced these adjustments for 2014. With inflation running low, the adjustments are modest. They impact such items as:

• Tax brackets
• Personal exemptions
• Standard deduction amounts
• Alternative minimum tax exemptions

Some items remain unchanged, including:

• Kiddie tax threshold
• Refundable child tax credit
• American opportunity credit income limit

For 2014, unless Congress makes a change, the parity for transportation fringe benefit ends so that the exclusion for free parking is $250 per month while the exclusion for transit passes and van pooling is $130 per month. In 2013, the exclusion for all of these benefits was the same: $245 per month.

Source: Rev. Proc. 2013-35