The IRS has announced in Notice 2018-83 new cost-of-living adjustments that affect dollar limitations for defined contribution plans and other retirement-related items for tax year 2019.
Those contributing to 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan will be able to boost their contribution from $18,500 to $19,000.
IRA contributions, not raised since 2013, will now be $6,000, up from $5,500. However, catch-up contributions for workers age 50 and over remain the same at $1,000.
Income ranges that determine eligibility for deductible contributions to traditional IRAs, Roth IRAs and to claim the saver’s credit have all increased for 2019.
For single taxpayers covered by a workplace retirement plan, the income range at which deductibility of traditional IRA contributions is phased out, formerly $63,000–$73,000, is now $64,000–$74,000.
For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range, formerly $101,000–$121,000, is now $103,000–$123,000.
For an IRA contributor not covered by a workplace retirement plan and married to someone who is covered, the deduction is phased out if the couple’s income is between $193,000 and $203,000; formerly the phase-out amounts were $189,000–$199,000.
For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0–$10,000.
Taxpayers making contributions to a Roth IRA now have a phase-out range of $122,000–$137,000 for singles and heads of household, up from $120,000–$135,000.
Married couples filing jointly now have an income phase-out range of $193,000–$203,000, up from $189,000–$199,000, while the phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0–$10,000.
The income limit for the Saver’s Credit, also called the Retirement Savings Contributions Credit, for low- and moderate-income workers is now $64,000 for married couples filing jointly, up from $63,000; $48,000 for heads of household, up from $47,250; and $32,000 for singles and married individuals filing separately, up from $31,500.
The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan has not changed from $6,000.
Additional information is available in the notice.
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