Mattina, Kent & Gibbons, P.C. logo

Rochester

1214 North Main Street

Rochester, MI 48307

(248) 601-9500

 

Lapeer

951 S. Main Street, Suite 3

Lapeer, MI 48446

(810) 664-4470

February 2019

Know Your Benefits Limits

A newspaper on a wooden desk - Changes coming in 2019

If your business offers its employees a retirement plan and other benefits, you should be aware of increases to contribution and income limits for tax year 2019 due to an inflation adjustment. Here’s a look at some of them:


RETIREMENT PLANS
Defined contribution plans – 401(k), 403(b) and 457 plans – see their contribution limits rise to $19,000, up $500 from 2018, while the catch-up contribution limit remains at an additional $6,000 for participants at least age 50. Total contributions by an employee and employer rise from $55,000 to $56,000. SEP-IRAs, profit sharing and money purchase plans have the same limit increase to $56,000.


The compensation limit to determine contributions increases $5,000 to $280,000, while the limit to determine discrimination testing also rises $5,000 to $180,000 of key employee compensation.


The elective contribution limit for a Simple IRA rises $500 to $13,000, with employer non-elective contributions capped at 2% of compensation up to $280,000, up from $275,000. The $3,000 catch-up contribution is unchanged. And, finally, the contribution limit for defined benefit pension plans increases to $225,000 from $220,000.


NUMBERS TO KNOW
In 2019, employees can contribute up to $2,700 into their health flexible spending accounts. The pre-tax transportation benefit is capped at $265 per month. The limit on adoption assistance is $14,080. The salary deduction phases out between $211,160 and $251,160 of taxable income.


If you have employees who earn their income overseas, the foreign earned income exclusion amount is $105,900. Don’t forget to adjust for increased Social Security income limits, if you haven’t already. That’s risen to $132,900, up from $128,400. And, finally, don’t forget to file all of your forms, including tax returns, on time. Failure to do so can be costly. Talk to your tax professional for more information.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox.

Please include name of person that directed you to my online newsletter so I can thank them personally.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.