2019 Social Security Wage Base & Retirement Updates

The Social Security Administration announced that the 2019 social security wage base for calculating the social security tax (OASDI) will increase to $132,900, up from $128,400 for 2018.

For 2019, individuals who participate in 401(k), 403(b), and most 457 retirement plans will be able to contribute $19,000, up from $18,500 for 2018. The additional catch-up contribution limit for individuals aged 50 and over remains unchanged for 2019 at $6,000.

The IRS also increased the annual IRA limit for 2019 to $6,000, up from $5,500 for 2018. The additional catch-up contribution limit for individuals aged 50 and over stays the same at $1,000.

The IRS also adjusted the income limits used to determine deductible IRA contributions. Per IRS Issue Number IR-2018-211, the 2019 phase-out ranges for individuals covered under a retirement plan at work are:

  • For single taxpayers, the phase-out range is $64,000 to $74,000, up from $63,000 to $73,000.
  • For married couples filing jointly, where the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is $103,000 to $123,000, up from $101,000 to $121,000.
  • For an IRA contributor who is not covered by a retirement workplace and is married to someone who is covered, the deduction is phased out if the couple’s income is between $193,000 and $203,000, up from $189,000 and $199,000.

For Roth IRA contributions, the income phase-out range is $122,000 to $137,000 for single and head of household filers, up from $120,000 to $135,000. For married filing joint taxpayers, the income phase-out range is $193,000 to $203,000, up from $189,000 to $199,000.

If you would like additional information or to discuss the topics mentioned, please contact one of our Tax Services Group partners – Jim Wagoner, CPA, Brandon Cook, CPA, or Marie Jett, CPA.