By Doug K. Nickerson, CPA, CCA, Partner
By Doug Nickerson, CPA, CGFM, CFE, CIA, CCA | Business Assurance & Advisory Services Partner
This information has been updated for 2020. Learn about the new limits on our most recent blog, 2020 Cost of Living Adjustments for Pension Plans
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:
| 2019 | 2018 | |
| 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 |
| Key Employee | $180,000 | $175,000 |
| Defined Benefit Maximum | $225,000 | $220,000 |
| Health Savings Accounts: | ||
|
$3,500 | $3,450 |
|
$7,000 | $6,900 |
|
$1,000 | $1,000 |
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%.
Questions on the changes? Contact your Keiter representative or Email | Call: 804.747.0000
About the Author
Doug K. Nickerson, CPA, CCA, Partner
Doug shares his real estate and construction accounting insights with his clients to help them achieve their financial goals. Doug is the leader of Keiter’s Construction Industry team and is a member of Keiter’s Real Estate, Healthcare & Medical Services, and Manufacturing Industry teams. Doug has over 18 years of experience in corporate accounting and public accounting providing audit and consulting services.
More Insights from Doug K. NickersonThe 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.
