STEPHEN SMALENBERGER, EA ®
As we step into a new tax year, we’re probably thinking, “How much can I put into certain accounts? I remember what I did in 2018, but has anything changed for 2019?”
Let’s talk about that so you can make the most of your tax exceptions towards retirement.
For 2019, if you had money that you wanted to defer through payroll into a 401K or 403 B, through your employer, you could do up to $19,000. This is up from $18,500. If you’re over the age of 50, this amount actually stayed the same so you could put up to $25,000 in a 401K or 4-3 B. Maybe even a 457.
Now if you’re contributing on your own, that means writing a check contributing to an IRA or a Roth IRA. That amount increased from $5,500 to an even $6,000. If you’re over age 50 again, that amount stayed the same. So someone over 50 could put $7,000 away.
A simple IRA increased to $13,000. That contribution catch up stayed the same at $3,000. So meaning the max could be $16,000.
And the last one, a SEP IRA. This is now a contribution amount based on either wages or net income. That increased to $56,000.
So as you can see, these change from year to year. It’s not always the same but they might not change either. And as things inflate, all of these are stepped up to something called cost-of-living-adjustment or COLA. So as you’re thinking about 2019, and you want to max out or take advantage of certain accounts, these are the new limits. If we can help you with any of that please let us know.
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The IRS announced it would be increasing contribution limits on retirement savings accounts. Read here about 2023 retirement savings update!
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