The IRS said that the limit on elective deferral contributions to 401(k) plans, 403(b) plans, most 457 plans, and the federal government’s Thrift Savings Plan will increase from $18,500 in 2018 to $19,000 in 2019. However, the catch-up contribution limit for those 50 and older remains $6,000 (Notice 2018-83). Most other inflation-adjusted amounts related to pensions increased from 2018 to 2019.
The maximum deductible individual retirement arrangement (IRA) contribution for 2019 will increase $500 to $6,000. The ability of taxpayers who are covered by workplace retirement plans to make a deductible IRA contribution is phased out for singles and heads of household who have adjusted gross incomes (AGIs) between $64,000 and $74,000, a slight increase from last year.
For married couples filing jointly, where the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phaseout range is $103,000 to $123,000 for 2019. These amounts also increased slightly from 2018. When an IRA contributor is not covered by a workplace retirement plan but is married to someone who is, the deduction is phased out if the couple’s income is between $193,000 and $203,000, also an increase from 2018.
For taxpayers making contributions to Roth IRAs, the phaseout range for determining the maximum contribution is $193,000 to $203,000 for married couples filing jointly and $122,000 to $137,000 for singles and heads of household. These limits were all increased from 2018.
The AGI limit for the saver’s credit is $64,000 for married couples filing jointly, $48,000 for heads of household, and $32,000 for single taxpayers and for married individuals filing separately, all increases from 2018.
— Sally P. Schreiber, J.D., (Sally.Schreiber@aicpa-cima.com) is a JofA senior editor.