November 23, 2020

2020 IRS Changes

2020 IRS Changes thanks for joining us today my name is Jane McGowan I'm the director of financial planning here at five plan partners and today I wanted to talk about some of the changes that the IRS has made going into 2020.

And this is a good time at year-end to kind of review, your your benefits your 401ks how much you're deferring in the plans and getting, some of those other topics and so today I just wanted to go over some of the, changes that they are making from 2019 going into 2020 the first change is the maximum amount that you can contribute to a 401k or 403b in 2019 it was 19,000 that is actually moving up $500 to, 19,500 in 2020 for the catch-up provision so additional contributions, you can make to those plans if you're over the age of 50 that's also going up $500 from 6,000 to $6,500 in 2020 if your company participates in, a simple IRA, those limits those contribution limits are also going up from 13,000 a year in 2019 to 13,500 the simple IRAs the catch-up provision for contributions if you're over 50 is actually staying flat at $3,000 a year.

The. Total amount that can be contributed into a defined contribution plan on your behalf is going up a thousand dollars from fifty six thousand to fifty seven thousand 2021 additional topic I want to discuss. Is the phase out the income phase-out limitations for Roth IRAs and tradition deductible traditional IRA contributions in, 2019 for single taxpayers Roth IRA contributions were phased out if you made between one hundred and, twenty two thousand and one hundred and thirty seven thousand an adjusted gross income in 2020 that number is going up between one hundred and, twenty four thousand and one hundred.

And thirty nine thousand for married filing joint tax payers last year the the Roth contributions phased out between, one hundred and ninety three thousand and two hundred and three thousand an adjusted gross income and in 2020 it goes up a thousand dollars so it, phases out between one hundred ninety six thousand and two hundred and six thousand an adjusted gross income for deductible IRA contribution in 2019 single taxpayers phased out between 64 and 74. Thousand dollars in AGI, in 2020 that number will go up a thousand dollars to phase out between 65,000 and 75,000 and adjusted gross income and then from, there married filing joint tax payers it's also they're also receiving a bump in those income limits between one hundred and three thousand and, one hundred and twenty three thousand and 2019 to one hundred, and four thousand to one.

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