By Doug Nickerson, CPA, CGFM, CFE, CIA, CCA | Business Assurance & Advisory Services Partner
On November 1, 2018, the Internal Revenue Service (IRS) announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019. The IRS issued technical guidance detailing these items in Notice 2018-83.
Highlights of the significant changes for 2019 as compared to 2018 limits are as follows:
|Employee Elective Deferral Limits-401(k), 403(b) & 457||$19,000||$18,500|
|Contribution Limits – IRAs||$6,000||$5,500|
|Defined Contribution Maximum||$56,000||$55,000|
|Annual Compensation Maximum||$280,000||$275,000|
|Highly Compensated Employee||$125,000||$120,000|
|Catch-Up Contributions Limit – 401(k), 403(b) & 457||$6,000||$6,000|
|Catch-Up Contributions Limit – IRAs||$1,000||$1,000|
|Defined Benefit Maximum||$225,000||$220,000|
|Health Savings Accounts:|
Social Security Program Annual Changes
Additionally, in October 2018 the Social Security Administration (SSA) announced its annual changes to the Social Security program effective January 1, 2019. A significant change is the increase of the taxable wage base to $132,900 for 2019. The tax rate will remain the same at 6.2%.
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.