Ask a CPA: Have funding limits changed in 2019?
IRS increase in funding limits offers opportunity to investors
If saving more is one of your goals for 2019, there’s good news—you can put away more money toward your retirement accounts this year.
CWA Planner and CPA Keith Klein says, “All pre-tax contributions to qualified retirement plans, such as 401(k)s, reduces taxable income and lowers the total taxes owed. That is why leveraging a tax-deferred savings environment is one of the best strategies to accumulate wealth.”
And with the IRS increasing the funding limits again this year, investors now have the opportunity to set even more aside. Even more notable, for the first time since 2013 the limits for individual retirement accounts have also increased.
Key changes for 2019
– 401(k) salary deferral limit increased $500 to $19,000 per individual
– IRA annual contribution limit increased $500 to $6,000
– Profit Sharing Plan annual limit increased to $37,000
– Health Savings Account (HSA) contribution limits increased to $7,000 for family coverage and $3,500 for individual
If you are 50 and over and looking to make up for lost time, catch-up contribution limits will remain the same for 2019. For 401(k) and other employee plans, you can put in an additional $6,000 in 2019. For IRAs, you can put in an additional $1,000.
As Keith works with his clients to plan out their annual budget and savings strategy, ensuring his clients are aware of limit changes, and creating a plan to maximize the contributions is essential.
“It’s important for investors to keep up with annual limit changes—checking with your CPA is the first step to ensure you are taking advantage of the maximum benefit allowed under the law.”
Looking to ensure you are taking advantage of the limits as they apply to your personal situation? For a complimentary consultation, reach out to our team at cainwatters.com/contact.
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