People with retirement savings accounts will be able to save more in 2019. The IRS has released inflation-adjusted amounts for retirement accounts and pension plans for 2019.
The 2019 cost-of-living adjustments (COLAs) for:
- pension plan dollar limitations, and
- other retirement-related provisions.
The contribution limit has increased from $18,500 for 2018 to $19,000 for 2019, for employees who take part in:
- 401(k) plans;
- 403(b) plans;
- most 457 plans; and
- the federal government’s Thrift Savings Plan.
The annual limit on contributions to an IRA has increased from $5,500 for 2018 to $6,000 for 2019. The catch-up contribution limit for individuals 50 and over remains at $1,000.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. The deduction phases out if the taxpayer or his or her spouse takes part in a retirement plan at work. The phase-outs do not apply if neither the taxpayer nor the spouse is covered by a retirement plan at work.
The phase out depends on the taxpayer’s filing status and income:
- For single taxpayers covered by a workplace retirement plan: the 2019 phaseout range is $64,000 to $74,000.
- For joint filers, when the spouse making the contribution takes part in a workplace retirement plan: the 2019 phaseout range is $103,000 to $123,000.
- For an IRA contributor who is not covered by a workplace retirement plan but whose spouse is covered: the 2019 phaseout range is $193,000 to $203,000.
- For a married individual covered by a workplace plan and filing a separate return: the 2019 phaseout range remains $0 to $10,000.
The 2019 income phaseout ranges for making Roth IRA contributions are:
- $122,000 to $137,000 for singles and heads of household;
- $193,000 to $203,000 for joint filers; and
- $0 to $10,000 for married separate filers.
Finally, the income limits for the Saver’s Credit—also known as the Retirement Savings Contributions Credit—for low- and moderate-income workers are:
- $64,000 for joint filers;
- $48,000 for heads of household; and
- $32,000 for singles and married separate filers
If you have questions about the 2019 inflation amounts for retirements accounts, contact an MCB Advisor at 703-218-3600 or click here. To review our tax news articles, click here. To learn more about MCB’s tax practice and our tax experts, click here.