New Limits for Retirement Plans

The IRS has announced new limits for retirement plans for the coming year.  Are you making the most of this tax benefit?  We are happy to help. Contact your HORNE tax advisor to review your plan and contributions to make the most of this tax saving benefit for 2019.  Here are a few of the new limits we can discuss:

LIMIT ON

REGULATION IMPACTED

OLD LAW

NEW LAW

Exclusion for elective deferrals

 §402(g)(1) (e.g., §401(k) and §403(b) 

$18,500

$19,000

Annual additions to defined contribution plans

§415(c)(1)(A)

$55,000

$56,000

Annual benefit under a defined benefit plan

§415(b)(1)(A)

$220,000

$225,000 

Annual compensation

§401(a)(17), §404(l), §408(k)(3)(C), and §408(k)(6)(D)(ii) 

$275,000

$280,000

Compensation regarding elective deferrals to SIMPLE retirement accounts

§408(p)(2)(E)

$12,500

$13,000

Elective deferrals to deferred compensation plans of state and local governments and tax-exempt organizations 

§457(e)(15)

$18,500

$19,000

Concerning the definition of “key employee” in a top-heavy plan

§416(i)(1)(A)(i)

$175,000

$180,000

Catch-up contributions to §§401(k), 403(b), and 457(b) plans for individuals age 50 or over

§414(v)(2)(B)(i)

Unchanged

Unchanged

Catch-up contributions to an employer’s SIMPLE plan for individuals age 50 or over

§414(v)(2)(B)(ii)

Unchanged

Unchanged

The definition of “highly compensated employee”

§414(q)(1)(B) 

$120,000

$125,000

Compensation amount regarding simplified employee pensions (SEPs) 

§408(k)(2)(C)

Unchanged

Unchanged

Compensation amount concerning the definition of “control employee” for fringe benefit valuation purposes

§1.61-21(f)(5)(i)

Unchanged

Unchanged

Compensation amount concerning the definition of “control employee” for fringe benefit valuation purposes

§1.61-21(f)(5)(iii)

$220,000

$225,000 

Annual contributions to an Individual Retirement Arrangement

 

$5,500

$6,000

Additional IRA catch-up contribution for individuals aged 50 and over

 

Unchanged

Unchanged