SIMPLE IRA Contribution Limits

SIMPLE IRA Contribution Limits

 

See Highlights of Changes for 2019

 

The information in the section and the links are directly from and to the IRS website

SIMPLE IRA contributions include:

  1. salary reduction contributions and
  2. employer contributions: a. matching contributions or b. nonelective contributions.

No other contributions can be made to a SIMPLE IRA plan.

Salary reduction contributions

The amount an employee contributes from their salary to a SIMPLE IRA cannot exceed $12,500 in 2015 – 2018.

If an employee participates in any other employer plan during the year and has elective salary reductions under those plans, the total amount of the salary reduction contributions that an employee can make to all the plans he or she participates in is limited to $18,500 in 2018 ($18,000 in 2015 – 2017). See more than one plan.

  • Catch-up contributions. If permitted by the SIMPLE IRA plan, participants who are age 50 or over at the end of the calendar year can also make catch-up contributions. The catch-up contribution limit for SIMPLE IRA plans is $3,000 in 2015 – 2018.

Employer matching contributions

The employer is generally required to match each employee’s salary reduction contributions on a dollar-for-dollar basis up to 3% of the employee’s compensation. This requirement does not apply if the employer makes nonelective contributions instead.

  • Lower percentage. An employer may choose to make a matching contribution less than 3%, but it must be at least 1% and for no more than 2 out of 5 years. See Notice 98-4 for more information. The employer must notify the employees of the lower match within a reasonable period before the 60-day election period for the calendar year.

Nonelective contributions

Instead of matching contributions, an employer can choose to make nonelective contributions of 2% of each eligible employee’s compensation. If the employer makes this choice, it must make nonelective contributions whether or not the employee chooses to make salary reduction contributions. An employee’s compensation up to $275,000 for 2018 ($270,000 for 2017)  is taken into account to figure the contribution limit.

If the employer chooses this 2% contribution formula, it must notify the employees within a reasonable period before the 60-day election period for the calendar year.

If you miscalculated elective deferrals and employer contributions and contributed less than required by the SIMPLE IRA plan document, find out how to correct this mistake.

If you haven’t timely given the annual notice to all eligible employees, find out how to correct this mistake.

Time limits for contributing funds

Employers must deposit employees’ salary reduction contributions to the SIMPLE IRA within 30 days after the end of the month in which the employee would have received them in cash. They must make matching contributions or nonelective contributions by the due date (including extensions) of their federal income tax return for the year.

If your plan is subject to Department of Labor rules, you may have to deposit employees’ deferrals sooner. Generally, plans that benefit employees other than an owner-employee (and spouse) are subject to the Department of Labor rules. These rules require you to transfer your employees’ elective deferral contributions to their SIMPLE IRAs at the earliest date on which the employer can reasonably segregate the contributions from the employer’s general assets. There is a 7-day safe harbor to deposit elective deferrals for which most SIMPLE IRA plans qualify.

If you haven’t deposited salary reduction contributions to employees’ SIMPLE IRAs by the above dates, find out how you can correct this mistake.

Additional resources

SEP IRA Contribution Limits

The following information is directly from and links to the IRS website

 

Contributions an employer can make to an employee’s SEP-IRA cannot exceed the lesser of:

  1. 25% of the employee’s compensation, or
  2. $55,000 for 2018 ($54,000 for 2017)

Note: Elective salary deferrals and catch-up contributions are not permitted in SEP plans.

If you’ve contributed more than the annual limits to an employee’s SEP-IRA, find out how to correct this mistake.

 

Additional resources

Coverdell ESA Contribution Limits

You may be able to contribute to a Coverdell ESA to finance the beneficiary’s qualified education expenses. Contributions must be made in cash, and they’re not deductible. Any individual whose modified adjusted gross income is under the limit set for a given tax year can make contributions. Organizations, such as corporations and trusts can also contribute regardless of their adjusted gross income. Contributors must contribute by the due date of their tax return (not including extensions). There’s no limit to the number of accounts that can be established for a particular beneficiary; however, the total contribution to all accounts on behalf of a beneficiary in any year can’t exceed $2,000.

 

Visit the IRS website for more information.

HSA Contribution Limits

Contribution limits for your self-directed HSA

Click to READ THE BLOG POST on May 1 2018

Taxpayers with Self-Directed HSAs May Contribute Higher Amount under In a nutshell (although somewhat complicated):

There are other stipulations about HSA contributions, distributions, and deductions that all taxpayers with health savings accounts should be aware of. We recommend you consult your tax advisor about how these may affect you.

If you’d like to open a self-directed HSA, our professionals at Next Generation can answer all your questions—in easy-to-understand language—and help you get your account open. Read more about self-directed health savings accounts on our website, or contact us at Info@NextGenerationTrust.com or 1.888.857.8058.

401(k) Owners (including Solo K owners)

Employee contribution limitations increased from $18,000 to $18,500 for 2018. The additional catch-up contribution for those 50 and older stays the same at $6,000. The annual maximum 401(k) (defined contribution) total contribution amount increased from $54,000 to $55,000 ($61,000 for those 50 and older).

 

Visit the IRS website for more information.

IRA Contribution Limits

 

See Highlights of Changes for 2019

 
For 2015, 2016, 2017 and 2018, your total contributions to all of your traditional and Roth IRAs cannot be more than:

The IRA contribution limit does not apply to:

 

Visit the IRS website for more information including: