The days between January 1 and tax filing day, April 15, 2019, represent a unique opportunity for retirement planning.
During this time period, you can ‘true up’ your full contribution for 2018, as well as make your 2019 deposit.
Brace yourself for a lot of numbers —I’m sorry! — but that’s what taxes are all about! If you have questions, or this makes your stomach hurt, just call me and I’ll help explain further (716-817-6425).
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $18,500 to $19,000.
The limit on annual contributions to an Individual Retirement Arrangement (IRA) which last increased in 2013, is increased from $5,500 to $6,000. The additional catch-up contribution limit for individuals aged 50
and over is not subject to an annual cost-of-living adjustment and remains $1,000, for a total of $7,000 for 2019.
If you’re under 50, this means $115.38 per week; if you’re 50+, you can save $134.61 per week for 52 weeks to reach the total.
The income ranges for making deductible contributions to traditional IRAs to contribute to Roth IRAs and to claim the saver’s credit all increased for 2019.
You can deduct contributions to a traditional IRA if you meet certain conditions. If during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced (phased out), until it is eliminated, depending on filing status ( single, head of household, married filing jointly, and married filing separately) and your income. If neither the taxpayer nor their spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply, and you can save the full amount.
Call me for the ranges, if you wish, and I’ll pass them along.
If you are negotiating your divorce settlement, please don’t forget to include which filing status you will use for 2018, 2019 and on. It may make a substantial difference in the amount of tax due.
Don’t let this opportunity to save for your future, using either Traditional or Roth IRA options, pass you by. You can gain either tax advantages for your current filing year or enrich your future. Contact me at 716-817-6425 for further information.
Don’t wait too long!
Avoid the common mistakes most women make about money, especially when they are in crisis- divorce, widowed, etc. Schedule a free consultation with me at Calendly.com/contactagrace; or call me at 716-817-6425.
