The cost-of-living adjustments (COLA) for the 2018 tax year are out. These rates released by the IRS are used to adjust various tax provisions from the standard deduction and personal exemption to retirement plan limits.
Here’s a comparison of the 2019 and 2018 retirement plan limits for 401(k), 403(b) and profit sharing plans:
|401(k), 403(b) and Profit sharing plans||2019||2018|
|401(k) Elective deferrals||19,000||18,500|
|Catch-up contributions (age 50 and older)||6,000||6,000|
|Defined contribution maximum deferral (employee and employer combined)||56,000||55,000|
|Employer annual compensation limit||280,000||275,000|
|Annual compensation of “key employees” in a plan designated as top-heavy||180,000||175,000|
|Annual compensation of “highly compensated employee” in a plan designated as top-heavy||125,000||120,000|
The retirement plan limits for IRAs are:
|IRA contribution limit||6,000||5,500|
|IRA catch-up contribution||1,000||1,000|
|IRA AGI deduction phase-out (starting at):|
|Single or head of household||64,000||63,0000|
For more information, click here.
Kevin C. Bach, CPA, CVA