A LITTLE THIS-A AND A LITTLE THAT-A

A potpourri of tax “stuff” -

+ The IRS recently announced, in Notice 2018-83, the contribution limits for retirement plans for calendar year 2019.

The maximum contribution to a traditional or ROTH IRA, or a combination of the two, is increased from $5,500 to $6,000.  The catch-up contribution for individuals age 50 or older remains at $1,000.

The maximum contribution to a 401(k), 403(b) and 457 retirement plans is increased from $18,500 to $19,000.  The catch-up contribution remains at $6,000.

The maximum contribution to a SIMPLE retirement plan is increased from $12,500 to $13,000.  The catch-up contribution remains at $3,000.

The maximum contribution to a SEP or Solo401(k) plan is increased from $55,000 to $56,000.  SEP and Solo401(k) contributions are based on a % of “compensation” or adjusted net earnings from self-employment.

+ Usually you are given the option of having IRA administrative, custodial or management fees deducted from the account balance or paying them directly by personal check.  You should pay these fees directly by sending the trustee a check.

By doing this you increase the tax-deferred accumulation within the account, so more money is available at retirement.

A reminder – investment expenses like IRA administrative, custodial or management fees are no longer deductible on Schedule A.  

+ Beginning in 2018 job-related moving expenses are no longer deductible.  And reimbursements of these deductible job-related moving expenses are included in taxable wages reported on Form 1040.  For tax years 2018 through 2025 only moving expenses incurred by a member of the Armed Forces on active duty who moves due to a military order are deductible.

However, according to IRS Notice 2018-75, if you made a job-related move in calendar year 2017 any qualified moving expenses related to the move that you were reimbursed by your employer in calendar year 2018 are excluded from gross taxable wages, if the reimbursement would have been excludable from income if made in calendar year 2017.  

+ Now that the Democrats, thankfully, control the House the GOP Tax Act will not be made permanent. 

FYI, here is my take on what true “tax reform” should look like – THE TAX CODE MUST BE DESTROYED.

What do you think?

TTFN