New Per-Diem Rates Go into Effect
October 2, 2018
The 20% Deduction (aka Section 199A)
December 20, 2018The 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 $6,000.
The IRS has announced the 2019 Pension Plan Limits as follows:
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Plan Limits
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2018
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2019
|
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401(k) Employee Deferral Contribution Limit
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$ 18,500
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$ 19,000
|
|
401(k) “Catch Up” Contribution Limit
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$ 6,000
|
$ 6,000
|
|
SIMPLE Plan Employee Contribution Limit
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$ 12,500
|
$ 13,000
|
|
Annual Defined Benefit Plan Limit
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$220,000
|
$225,000
|
|
Annual Defined Contribution Plan Limit
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$55,000
|
$ 56,000
|
|
Annual Compensation Limit
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$275,000
|
$280,000
|
|
Highly Compensated Employee Limit
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$120,000
|
$125,000
|
|
Social Security Wage Base
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$128,400
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$132,900
|
