Proactive tax planning throughout the year is the key to reducing taxes and maximizing your after-tax dollars for wealth accumulation. This is accomplished by applying changing tax laws to your specific situation. Each year the IRS provides updates to a number of key limits that impact tax deductions, contributions, and other deferrals throughout the year. Below are some of the more notable changes to the law.
Elective deferrals to 401(k), 403(b), 457 and SARSEP’s $19,000 annual limit with a $6,000 age 50+ catchup. Defined Contribution limit $56,000.
IRA and Roth IRA contribution limits are increased to $6,000 with a $1,000 age 50+ catchup
IRA deduction phaseout for active participants in a retirement plan
Single $64,000 – $74,000 Adjusted Gross Income (AGI)
Married filing jointly $103,000 – $123,000 AGI
Non-active participant married to active participant $193,000 – $203,000 AGI
Roth IRA phaseout
Single $122,000 – $137,000
Married filing jointly $193,000 – $203,000
Non–deductible IRA contributions – There is no income limit
Simple IRA $13,000 maximum contribution with an age 50+ catchup of $3,000
Ohio allows a $4,000 deduction per beneficiary to a 529 college savings plan and the earnings will never be taxed so long as they are used for college expenses.
Estate and Gift Tax
Annual family gift tax exclusion $15,000
Estate and gift tax exclusion $11,400,000
Health Savings Account Contribution Maximum
Catch-up age 55 and older $1,000
Married filing jointly $24,400
Blind and elderly additional deduction single $1,650 and married $1,300
Required Minimum Distributions
Individuals age 70½ or older may have as much as $100,000 a year transferred tax free from their individual retirement accounts (IRAs) to qualified charitable organizations.
For more information about the tax planning strategies we utilize, please visit us at www.twpeam.com or contact directly Rob Lemmons, CFP®, CPA, AIF at 513-984-6696.