2019 IRA Contribution Limits and Tax Tables

Kevin Wray Finance 101, Retirement, Retirement Planning, Tax & Finance

Well, it’s that time of year again -time to start thinking about taxes. Before we know it, January will be here so I’d like to take a moment to inform everyone of the new IRA limits and eligibility. I know this is probably not your favorite activity, but take heart in the fact that we all have to travel the same road. So here we go…

For the year 2019 you can contribute up to $6000 to either a Roth or Traditional IRA if you are under the age of 50. If you are age 50 or older you can contribute up to $7000.1 

ROTH IRA’s

So who is eligibile for a Roth IRA for 2019? This all depends on your tax filing status.

If you are married filing jointly and

  • your income is under $193,000 you can contibute up to the limit.
  • your income is above $193,000 but less than $203,000 you will be able to contribute a reduced amount.
  • your income is over $203,000 you can not contribute to a Roth, however there are ways to contribute to a non deductible IRA and then convert to a Roth. Contact our office if you have questions.

If you are filing single there are also limits:

  • If your income is under $122,000 you can contribute up to the maximum.
  • If your income is more than $122,000 but less than $137,000 you can contribute a reduced amount.
  • If your income is above $137,000 then you can not contriute to a Roth.

If you are thinking about converting some of your traditional IRA’s to a Roth there are no limits, and anyone can do so.

GIFTING FOR 2019

For those of you considering gifting money to somone there is also a limit. For 2019 you can gift anyone you like up to $15,000 with no taxes. You can gift to as many people as you like.

TAX BRACKETS FOR 2019

Marginal Tax Rate2

                         SINGLE                                    Married filing jointly

10%                 $0 - $9700                          $0- $19,400

12%               $9701- $39745                  $19,400- $78,950

22%               $39,476- $84,200                 $78,950-  $168,400

24%                $84,201- $160,725               $168,401- 321,450

32%                $160,726- $204,100             $321,451- $408,200

35%                $204,101- $510,300            $408,201- $612,350

37%                Over $510,301                      Over $612,350                      

 

We are in a low tax rate enviroment right now so there are planning opportunies. Should you be considering contributing to a Roth IRA vs a Traditional? With the low tax rate enviroment does it make sense to convert some of your Traditional IRA to a Roth? Don’t let these opportunies pass you by. Take action and see if you can better your sitution.  As always, if you have any questions all you have to do is reach out to us and we will be glad to assist you in anyway that we can.

 

1 https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits

2 https://taxfoundation.org/2019-tax-brackets/