IRA contribution limits
The maximum amount you can contribute to a Traditional IRA or a Roth IRA in 2019 is $6,000 (or 100% of your earned income, if less). This is the first time the contribution limit for IRAs has increased since 2013. The maximum catch-up contribution for those ages 50 or older remains unchanged at an additional $1,000. You can contribute to both a traditional IRA and a Roth IRA in 2019, but your total contributions can’t exceed these annual limits.
Traditional IRA income limits
The income limits for determining the deductibility of Traditional IRA contributions in 2019 have increased. If your filing status is single or head of household, you can fully deduct your IRA contribution up to $6,000 in 2019 if your modified adjusted gross income (MAGI) is $64,000 or less (up from $63,000 in 2018). If you’re married and filing a joint return, you can fully deduct up to $6,000 in 2019 if your MAGI is $103,000 or less (up from $101,000 in 2018). Note that these figures assume you are covered by a retirement plan at work.
If you’re not covered by an employer plan but your spouse is, and you file a joint return, your deduction is limited if your MAGI is $193,000 to $203,000 (up from $189,000 to $199,000 in 2018), and eliminated if your MAGI exceeds $203,000. Single filers, head-of-household filers, and married joint filers who are not covered by an employer plan can deduct the full amount of their contributions.
Roth IRA income limits
The income limits for determining how much you can contribute to a Roth IRA have also increased for 2019. If your filing status is single or head of household, you can contribute the full $6,000 to a Roth IRA if your MAGI is $122,000 or less (up from $120,000 in 2018). And if you’re married and filing a joint return, you can make a full contribution if your MAGI is $193,000 or less (up from $189,000 in 2018). Again, contributions cannot exceed 100% of your earned income.
Employer retirement plans
Most of the significant employer retirement plan limits for 2019 have also increased. The maximum amount you can contribute (your “elective deferrals”) to a 401(k) plan is $19,000, up from $18,500 in 2018. This limit also applies to 403(b) and 457(b) plans, as well as the Federal Thrift Plan. If you’re age 50 or older, you can also make catch-up contributions of up to an additional $6,000 to these plans in 2019. (Special catch-up limits apply to certain participants in 403(b) and 457(b) plans.)
The maximum amount that can be allocated to your account in a defined contribution plan (for example, a 401(k) or profit-sharing plan) in 2019 is $56,000, up from $55,000 in 2018, plus age 50 catch-up contributions. This includes both your contributions and your employer’s contributions.
If you have any questions about these new 2019 contribution limits, please contact your JNBA Advisory Team.
JNBA is not an accountant and no portion of the above should be construed as accounting advice. All accounting issues should be addressed with an accounting professional of your choosing.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, Inc.
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