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The Inflation Adjusted Thresholds For Various Tax Levels Announced



Lisa Nason- The Inflation Adjustment

The Social Security Administration (SSA) announced that the maximum earnings subject to the Social Security component of the FICA tax will increase from $128,400 to $132,900 for 2019. This means that for 2019, the maximum Social Security tax that employers and employees will each pay is $8,239.80 ($132,900 x 6.2%). A self-employed person with at least $132,900 in net self-employment earnings will pay $16,479.6 ($132,900 x 12.40%) for the Social Security part of the self-employment tax. The Medicare component remains 1.45% of all earnings, and individuals with earned income of more than $200,000 ($250,000 for married couples filing jointly, $125,000 for married filing separately) will pay an additional 0.9% in Medicare taxes.

The IRS also announced that the limits on elective deferral for contributions to 401(k) plans, 403(b) plans, most 457 plans, and the federal government’s Thrift Savings Plan will be as follows for 2019.  Please note that the catch-up contribution limit for those 50 and older remains $6,000.

The IRS has announced the 2019 Pension Plan Limits as follows:

          Plan Limits
     2018
     2019
401(k) Employee Deferral Contribution Limit
 $ 18,500
$ 19,000
401(k) “Catch Up” Contribution Limit
 $  6,000
$  6,000
SIMPLE Plan Employee Contribution Limit
 $ 12,500
$ 13,000
Annual Defined Benefit Plan Limit
 $220,000
$225,000
Annual Defined Contribution Plan Limit
 $55,000
$ 56,000
Annual Compensation Limit
 $275,000
$280,000
Highly Compensated Employee Limit
 $120,000
$125,000
Social Security Wage Base
 $128,400
$132,900

Have a question? Contact Lisa Nason.

 

 

Tax Partner with more than 20 years of experience preparing tax returns businesses and individuals, including income tax, property tax, state and local tax, sales & use tax, etc. We also work on estate and trust returns as well as assisting with tax planning, tax audits, and bookkeeping. We also help clients with general business advice and consulting as needed.

Nason Accounting, LLC is a Greenville, SC based full service certified public accounting firm that helps businesses and individuals increase and preserve their financial net worth. We provide accurate and timely accounting information that is vital for any individual or business.

We service clients both locally in the Upstate and throughout the Southeast. Our team understands the importance of great customer service, eliminating cumbersome bookkeeping stress, and making your success a priority. With experience in every imaginable accounting service, Nason Accounting, LLC is prepared to help you and your business with all of your financial needs.

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