Here is a look at the areas that are being impacted by the 2019 cost-of-living adjustments.
The IRS has released the 2019 cost-of-living adjustments (COLAs) for two significant areas–pension plan dollar limitations and other retirement-related provisions. Here is a look at the areas that are being impacted.
The contribution limit has increased from $18,500 for 2018 to $19,000 for 2019, and applies to employees who take part in any of the following types of retirement plans:
Additionally, the annual limit on contributions to an IRA has increased from $5,500 for 2018 to $6,000 for 2019. The catch-up contribution limit for individuals over the age of 50 remains at $1,000.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. The deduction phases out if the taxpayer or spouse takes part in a retirement plan at work; the phase-outs do not apply if neither the taxpayer nor the spouse is covered by a retirement plan at work.
The phase-out depends on the taxpayer’s filing status and income:
For Roth IRA contributions, the 2019 income phase-outs are:
Finally, the income limits for the Saver’s Credit—also known as the Retirement Savings Contributions Credit—for low- and moderate-income workers are:
As we now enter into 2019, people should be mindful of each of these adjustments as they plan for the coming year.
Dina Ouellette, CPA, is a Director with blumshapiro, the largest regional business advisory firm based in New England, with offices in Connecticut, Massachusetts and Rhode Island. The firm, with a team of over 500, offers a diversity of services, which include auditing, accounting, tax and business advisory services. blum serves a wide range of privately held companies, government and non-profit organizations and provides non-audit services for publicly traded companies. To learn more visit us at blumshapiro.com.