401k and IRA Contribution and Deduction Limits for 2019

In 2019, 401k contribution limits have gone up, and even IRA contribution limits have changed for the first time in several years. Here are all the details, including IRA deduction limits.

401k contribution limits

The IRS released the new 2019 401k and IRA contribution and deduction limits. The limits for 401ks jumped by $500 to $19,000, the second increase since 2015. And contribution limits for IRAs have increased by $500–the first increase they have seen since 2013! Here are the details.

401(k) Contribution Limits

As announced by the IRS, the contribution limit for 401(k) accounts increased from $18,500 in 2018 to $19,000 for 2019.  Those 50 or older also get the catch-up contribution of $6,000. That brings the total contribution limit to $25,000 for those who qualify. These new contribution limits also apply to 403(b), most 457 plans, and the federal government’s Thrift Savings Plan.

Tax Year Regular Contribution Limit Catch-up Contribution Limit for those 50 & older
2019 $19,000 $6,000
2018 $18,500 $6,000
2017 $18,000 $6,000
2016 $18,000 $6,000
2015 $18,000 $6,000
2014 $17,500 $5,500
2013 $17,500 $5,500
2012 $17,000 $5,500
2011 $16,500 $5,500
2010 $16,500 $5,500
2009 $16,500 $5,500
2008 $15,500 $5,000
2007 $15,500 $5,000
2006 $15,000 $5,000

IRA Contribution and Deduction Limits

With a deductible IRA, it’s important to understand both the contribution limits and the income limits to qualify for the deduction. While you can always contribute up to the $6,000 contribution limit assuming you have sufficient earned income, you’ll only be able to deduct your contribution on your federal taxes if you meet certain income limits.

IRA Contribution Limits

The maximum contribution in 2019 is $6,000. The catch-up contribution for those 50 and older remains $1,000 (the catch-up contribution for an IRA is not indexed for inflation, so it always remains at $1,000). Here are the IRA contribution limits over the last several years:

Tax Year Regular Contribution Limit Catch-up Contribution Limit for those 50 & older
2019 $6,000 $1,000
2018 $5,500 $1,000
2017 $5,500 $1,000
2016 $5,500 $1,000
2015 $5,500 $1,000
2014 $5,500 $1,000
2013 $5,500 $1,000
2012 $5,000 $1,000
2011 $5,000 $1,000
2010 $5,000 $1,000
2009 $5,000 $1,000
2008 $5,000 $1,000
2007 $4,000 $1,000
2006 $4,000 $1,000

Deductible IRA Income Limits

Now on to the question of whether your IRA contribution is deductible. Whether your IRA contribution is deductible depends on three factors: (1) your filing status, (2) your adjusted gross income, and (3) whether you are covered by a retirement plan at work.

Below are the limits based on whether or not you are covered by a retirement plan at work in 2019:

You Are Covered by a Retirement Plan

In this scenario, if you are covered by a retirement plan at work, you’ll need to know your modified adjusted gross income. Here are the income and phase out limits based on your tax filing status:

  • If you are filing as single or head of household and your MAGI is $64,000 or less in 2019, you can deduct up to the full contribution limit to your IRA. If your income is between $64,000 and $74,000, you can take a partial deduction for your contributions. And if your income is above $74,000, you cannot take a deduction for IRA contributions.
  • If you are married filing jointly or a qualifying widow(er), you can take a full deduction if your income is under $103,000. If your income is between $103,000 and $123,000, you can take a partial deduction, and you get no deduction if your income is more than $123,000.
  • If you are married filing separately, you can take a partial deduction if your MAGI is less than $10,000, but get no deduction if your income is above that amount.

You Are Not Covered by a Retirement Plan

What if you don’t have a work-sponsored retirement plan to contribute to? In this case, the limits are more relaxed:

  • If you are single, head of household, or a qualifying widow(er), you can deduct up to the contribution limit for 2019 when you contribute to a traditional IRA.
  • If you are married filing jointly or separately and your spouse also does not have a work-sponsored retirement plan, you can also deduct the full deduction up to the contribution limit.
  • If you are married filing jointly and your spouse does have a work-sponsored retirement plan, you can take the full deduction only if your combined MAGI is $193,000 or less. If your MAGI is between $193,000 and $203,000, you can take a partial deduction for IRA contributions. And if your income is above $203,000, you can take no deduction for IRA contributions.

If you are married filing separately with a spouse who is covered by a work-sponsored employment plan, you can take a partial deduction if your MAGI is $10,000 or less. If your MAGI is more than $10,000, you cannot take a deduction at all.

(Note: If you’re interested in a Roth IRA, those income limits have changed as well. You can get the scoop on Roth IRA limits here.)

SEP IRAs and Solo 401(k)s

Self-employed individuals have a broader range of options they can use for saving for retirement, including SEP IRAs and Solo 401(k)s. These plans allow participants to contribute a higher percentage of their income or dollar amount, and some plans also offer the option to put in employer-contributions on behalf of the business.

In 2019, those with an SEP IRA can contribute the lesser of 25% of their total compensation or $56,000. The total compensation limit for 2019 is $280,000. For a Solo 401(k), an business owner can contribute up to $19,000 in 2019 as an employee, or up to $25,000 if their are age 50 or over. Then they can add additional money as the employer–up to 25% of their compensation.

You can learn more about these plan options in this article.

The table below shows these historical changes for SEP IRAs:

Tax Year Compensation Limit Contribution Limit
2019 $280,000 $56,000
2018 $275,000 $55,000
2017 $270,000 $54,000
2016 $265,000 $53,000
2015 $265,000 $53,000
2014 $260,000 $52,000
2013 $255,000 $51,000
2012 $250,000 $50,000
2011 $245,000 $49,000

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Topics: Retirement Planning

20 Responses to “401k and IRA Contribution and Deduction Limits for 2019”

  1. I have started working for a new employer from December 2017 and they have 401K. So I have contributed $3,000 in 401k in the year of 2017.
    If I put $5,500 in IRA, will it be tax deductible?

  2. I am a federal employee and with my husband and myself I discovered we were above the Roth income limits and therefore I tried to close the Roth portion only of my TSP – only to have them close both my traditional TSP (they sent a check) and then sent the Roth portion to Edward Jones – stating you can only withdraw proportionally. Now I feel like my entire retirement savings is hosed! TSP reported it as a withdrawal to the IRS so I cannot now classify it as a rollover and recover some even though they sent a substantive portion of my savings to the IRS as well. We’re talking a lifetime of savings and TSP tells me they don’t care they didn’t make a mistake. Now I guess I don’t ever retire.

  3. S. Allen

    I understand the income limits for married filing jointly (both also covered under employer’s plan), but are these limits based on the individual’s income (the one contributing to the IRA) or on the AGI of the married couple? I want to open a traditional IRA and my income is below the limits; however, my household income (my income + spouse) is not. Which income am I looking at when reading the chart?

    S.Allen

  4. I contribute to a 401K plan with my employer and I also have a traditional IRA. I was going to do a catch-up contribution for the IRA but my income is over the limit to be deductible. What are the advantages for doing the catch-up contribution anyway? Thank you.

    • Rob Berger

      Dibs, the advantage is that any earnings will grow tax deferred until you withdrawal the money. That may or may not be a big enough advantage depending on your circumstances. Do you qualify for a Roth?

  5. I understand what the 401K and IRA Contribution limits are. I also understand that the Deductibility for IRA contributions may be limited depending upon one’s income level. What I don’t understand is this: Can I contribute the max of $23,000 for 2014 to my 401K REGARDLESS of my income level, or is it too effected by my income – and if so, what are the levels. I am afraid that I may have contributed too much to my 401K this year. Please respond. Thanks.

    • Rob Berger

      Bob, since 401(k) contributions come directly out of your paycheck, it’s difficult to over-contribute. It can happen if you have multiple jobs or change jobs during the year. But if your employer took out the max, I assume your income was sufficient to cover the contributions. You could always check with your 401k administrator to make sure.

  6. Rob, in the IRA contributions section, for both 2014 and 2015, you mention “Married Couples Filing Jointly” twice, the first instance of each should be “filing separately” I believe.

    • Rob Berger

      Kenneth, actually those both should be filing separately. One is when the spouse making the contribution is covered by a workplace plan. The other is when the spouse making the contribution is NOT covered by a plan, but his or her spouse is.

  7. I am an employee of the federal government and have a Thrift Savings Plan. I have been thinking about additionally opening an IRA because of the flexibility of what you can invest in. 401(k)’s are limited and the TSP is even worse. The only reason I am sticking with it is because my employer matches up to 5%.

    I would like to know what the contribution limitations are when you have one of each. My guess is that you cannot do the full contribution for both.

    • Bianca,

      The limit for the TSP is the same as a 401k ($17,000 this year, $17,500 for 2013) and the limit for an IRA is $5,000 this year, and $5,500 in 2013. The amounts are independent of each other.

      If I were you, I would contribute more to the TSP. The funds are managed by Blackrock – they have great returns and low fees. Low fees are surprising for funds run by Blackrock, but they must have some kind of deal in place for the government. Makes me wish I were still in the Army.

  8. I am aware there are limits for both 401(k) and IRA plans. I am a federeal government employee and have the Thrift Savings Plan. I am thinking about opening an IRA to contribute more money towards retirement. IRA’s are more flexible in what you want to contribute to as compared to 401(k)’s and my dreaded TSP. The only reason I am even keeping my TSP is because my employer matches up to 5%. I figure free money is free money.

    My question is what is the limit on contributions if you have both accounts? I read somewhere that you have to consider both or you will be penalized for over contributing.

  9. Just a note that if you are disqualified from contributing to a Roth IRA because of income limits, you can always open a non-deductible Traditional IRA and convert it immediately to a Roth.

    I’ve been doing it for the past 3 years because of income limitations and plan to do it again in 2013. Keeping my fingers crossed that lawmakers don’t close the loophole, or get some sense in their heads and just lift the income limits.

    • Scott Venerable

      Long,

      I have a client who has 2 million in taxable income each year and looking for creative ways to reduce that taxable income. How does opening a Traditional IRA and then Converting immediately to a Roth help with this problem?

  10. Just a note that if you are disqualified from contributing to a Roth IRA because of income limits, you can always open a non-deductible Traditional IRA and convert it immediately to a Roth.

    I’ve been doing it for the past 3 years because of income limitations and plan to do it again in 2013. Keeping my fingers crossed that lawmakers don’t close the loophole, or get some sense in their heads and just lift the income limits.

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