TAX STRATEGIES, ADVICE, & INSIGHTS

Which Tax-Related Limits Affecting Your Business Are Increasing in 2019?

Posted by L&H CPAs on Jan 24, 2019 10:35:35 AM

employee benefit plan limits

A variety of tax-related limits affecting businesses are annually indexed for inflation, and many have gone up for 2019. Here’s a look at some of the most important changes that may affect you and your business.

 

Deductions

  • Section 179 expensing:

    • Limit: $1.02 million (up from $1 million)
    • Phaseout: $2.55 million (up from $2.5 million)
  •  Income-based phase-ins for certain limits on the Sec. 199A qualified business income deduction:

    • Married filing jointly: $321,400-$421,400 (up from $315,000-$415,000)
    •  Married filing separately: $160,725-$210,725 (up from $157,500-$207,500)
    •  Other filers: $160,700-$210,700 (up from $157,500-$207,500)

Retirement plans

• Employee contributions to 401(k) plans: $19,000 (up from $18,500)
• Catch-up contributions to 401(k) plans: $6,000 (no change)
• Employee contributions to SIMPLEs: $13,000 (up from $12,500)
• Catch-up contributions to SIMPLEs: $3,000 (no change)
• Combined employer/employee contributions to defined contribution plans (not including catch-ups): $56,000 (up from $55,000)
• Maximum compensation used to determine contributions: $280,000 (up from $275,000)
• Annual benefit for defined benefit plans: $225,000 (up from $220,000)
• Compensation defining “highly compensated employee”: $125,000 (up from $120,000)
• Compensation defining “key employee”: $180,000 (up from $175,000)


Other employee benefits

  • Qualified transportation fringe-benefits employee income exclusion: $265 per month (up from $260)
  • Health Savings Account contributions:
    • Individual coverage: $3,500 (up from $3,450)
    • Family coverage: $7,000 (up from $6,900)
    • Catch-up contribution: $1,000 (no change)
  • Flexible Spending Account contributions:
    • Health care: $2,700 (up from $2,650)
    • Dependent care: $5,000 (no change)


Additional rules apply to these limits, and they are only some of the limits that may affect your business. Please contact us for more information so we can help you make the best financial decisions for your business and your employees.


© 2019

Tags: Business Owners & Entrepreneurs

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