The New Year typically brings slight changes in financial contribution limits to various accounts like 401(k), 403(b), and 457 plans. 2019 is no different. However, there are some significant changes in 2019 that do not occur every year, and it is in your best interest to be aware of them in order to take full advantage of the opportunities they bring.
Here are a few notable increases in contribution amounts for the coming calendar year:
401(k), 403(b), and 457 plans increased from $18,500 in 2018 to $19,000 in 2019. $500 is the standard annual increase. The catch-up contribution for individuals age 50 and over will allow you to contribute an additional $6,000 for a total of $25,000.
IRA contributions have increased for the first time in six years. Since 2013 the contribution limit has been $5,500, but starting this year the limit is now $6,000. The catch-up contribution for those age 50 and over remains the same and allows a person to contribute an extra $1,000.
Solo 401k/Profit Sharing plans will allow for a contribution of $56,000 in 2019, which is up from $55,000 in 2018. As is the case with a group 401k, individuals over the age of 50 are permitted to make an extra catch-up contribution of $6,000 to their Solo 401k plan, which brings the total eligible contribution to $62,000 for the year.
The SIMPLE IRA contribution limit has increased to $13,000 in 2019 and for those age 50 and over, an additional $3,000 can be contributed as a catch-up contribution as has been the case since 2015.
SEP IRA contributions were increased from $55,000 in 2018 to $56,000 in 2019; however, catch-up contributions are not allowed with this plan for individuals age 50 and older.
IRA income phaseout ranges increase from $101,000-$121,000 in 2018 to $103,000-$123,000 in 2019 for those married filing jointly, and from $63,000-$73,000 in 2018 to $64,000-$74,000 in 2019 for single filers.
Roth IRA income phaseout ranges increase from $120,000-$135,000 in 2018 to $122,000-$137,000 in 2019 for single filers and heads of household. It increases from $189,000-$199,000 in 2018 to $193,000-$203,000 in 2019 for those married filing jointly.
Health Savings Accounts (HSA) contributions will increase from $3,450 in 2018 to $3,500 in 2019 for individuals, and from $6,900 in 2018 to $7,000 in 2019 for families.
For a more comprehensive list of contribution increases that take effect this year as well as explanations of each increase, click here to visit the IRS website.
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