There is nothing sweeter about the IRS than when they give us more opportunities to avoid taxes, now and in the future. This year they have announced increases pretty much across the board for the first time since 2013.
- The IRS increased the 401(k) contribution limit from $18,500 to $19,000 (net $500 increase) in 2019. Catch up contributions for those over 50 remains the same at $6,000.
- The Traditional and Roth IRA contribution limit is also up $500 from $5,500 to $6,000. Catch up contributions for those over 50 remains the same at $1,000.
- The SIMPLE IRA also sees an increase of $500, from $12,500 to $13,000. Catch up contributions for those over 50 remains the same at $3,000.
- Many income limits on who can participate in these plans are going up as well.
The IRS has not increased the catch-up contribution payments because these catch-up contribution limits are not adjusted for inflation.
Please keep in mind that these are for the 2019 tax year and beyond. As always, if you have a tax question, check with your CPA to make sure you are eligible. Speak with your financial advisor to see how this affects your current plans and goals.
For more details, consult the official press release from everyones favorite agency, the IRS: https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19000-for-2019-ira-limit-increases-to-6000
This post was written with help from our wonderful intern, Bella LaRosa.
