401k and Retirement Plan Limits for the Tax Year 2019

The Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2019.

401k Contribution

Highlights of Changes for 2019

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000.

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 remains unchanged at $6,000.


Chart of Select Limits
401k Plan Limits for Year 2019 2018 2017 2016 2015 2014 2013
401k Elective Deferrals $19,000 $18,500 $18,000 $18,000 $18,000 $17,500 $17,500
Annual Defined Contribution Limit $56,000 $55,000 $54,000 $53,000 $53,000 $52,000 $51,000
Annual Compensation Limit $280,000 $275,000 $270,000 $265,000 $265,000 $260,000 $255,000
Catch-Up Contribution Limit $6,000 $6,000 $6,000 $6,000 $6,000 $5,500 $5,500
Highly Compensated Employees $125,000 $120,000 $120,000 $120,000 $120,000 $115,000 $115,000
 
Non-401k Related Limits
403b/457 Elective Deferrals $19,000 $18,500 $18,000 $18,000 $18,000 $17,500 $17,500
SIMPLE Employee Deferrals $13,000 $12,500 $12,500 $12,500 $12,500 $12,000 $12,000
SIMPLE Catch-Up Deferral $3,000 $3,000 $3,000 $3,000 $3,000 $2,500 $2,500
SEP Minimum Compensation $600 $600 $600 $600 $600 $550 $550
SEP Annual Compensation Limit $280,000 $275,000 $270,000 $265,000 $265,000 $260,000 $255,000
Social Security Wage Base $132,900 $128,400 $127,200 $118,500 $118,500 $117,000 $113,700

Mileage Rates for 2018

The IRS recently announced mileage rates to be used for travel in 2018.

  • The standard business mileage rate increased by 1 cent to 54.5 cents per mile.
  • The medical and moving mileage rates also increased by 1 cent to 18 cents per mile.
  • Charitable mileage rates remained unchanged at 14 cents per mile.
2018 Standard Mileage Rates
Mileage Rate/Mile
Business Travel 54.5¢
Medical/Moving 18.0¢
Charitable Work 14.0¢
Mileage Rates

Here are 2017 rates for your reference as well.

2017 Standard Mileage Rates
Mileage Rate/Mile
Business Travel 53.5¢
Medical/Moving 17.0¢
Charitable Work 14.0¢
Mileage Rates

Remember to properly document your mileage to receive full credit for your miles driven. We recommend using MileIQ for recording your miles. (Note that there might be additional fees involved)

Call Darshi Kasotia, CPA today at 832 532 3000 or Contact Us online now.

 

1099 Filing Date Just Around The Corner

If you operate a business and engage the services of an individual (independent contractor) other than one who meets the definition of an employee, and you pay him or her $600 or more for the calendar year, you are required to issue the individual a Form 1099-MISC soon after the end of the year to avoid penalties and the prospect of losing the deduction for his or her labor and expenses in an audit.

The due date for mailing the recipient his or her copy of the 1099-MISC that reports 2017 payments is January 31, 2018. That is also the due date for filing the 1099-MISC with the IRS.

Call Darshi Kasotia, CPA today at 832 532 3000 or Contact Us online now.

401k and Retirement Plan Limits for the Tax Year 2018

On October 19, 2017, the Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans

and other retirement-related items for the tax year of 2018.

Retirement Savings

Highlights of Changes for 2018

The contribution limit for employees who participate in 401k, 403b, most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,000 to $18,500.

The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the saver’s credit all increased for 2018.


Chart of Select Limits
401k Plan Limits for Year 2018 2017 2016 2015 2014 2013 2012
401k Elective Deferrals $18,500 $18,000 $18,000 $18,000 $17,500 $17,500 $17,000
Annual Defined Contribution Limit $55,000 $54,000 $53,000 $53,000 $52,000 $51,000 $50,000
Annual Compensation Limit $275,000 $270,000 $265,000 $265,000 $260,000 $255,000 $250,000
Catch-Up Contribution Limit $6,000 $6,000 $6,000 $6,000 $5,500 $5,500 $5,500
Highly Compensated Employees $120,000 $120,000 $120,000 $120,000 $115,000 $115,000 $115,000
 
Non-401k Related Limits
403b/457 Elective Deferrals $18,500 $18,000 $18,000 $18,000 $17,500 $17,500 $17,000
SIMPLE Employee Deferrals $12,500 $12,500 $12,500 $12,500 $12,000 $12,000 $11,500
SIMPLE Catch-Up Deferral $3,000 $3,000 $3,000 $3,000 $2,500 $2,500 $2,500
SEP Minimum Compensation $600 $600 $600 $600 $550 $550 $550
SEP Annual Compensation Limit $275,000 $270,000 $265,000 $265,000 $260,000 $255,000 $250,000
Social Security Wage Base $128,700 $127,200 $118,500 $118,500 $117,000 $113,700 $110,100

401(k) limits to change for 2018

401k Contribution
A 401(k) is a good way to save for retirement because your money grows tax-free.

The government will raise the contribution limit to $18,500 from $18,000 in 2018.

Those age 50 and older can save even more by making what’s called a “catch-up” contribution. The catch-up contribution is limited to $6,000 a year, for a total of $24,500.

These limits don’t include the matching contribution you may receive from your employer.

They also apply to 403(b) plans and the federal government’s Thrift Savings Plan.

The New Year is a great opportunity to meet with your tax professional and begin planning to meet your tax goals.

Call Darshi Kasotia, CPA today at 832 532 3000 or Contact Us online now.