IRS Announces 2020 Contribution Limits
The IRS has provided contribution limit information for tax-advantaged plans due to take effect in 2020. You can read about them in detail on the IRS website, but here are the pertinent highlights:
- Health Savings Account (“HSA”) holders with single high-deductible health plans ("HDHPs") may contribute up to $3,550 in 2020 (up from $3,500 in 2019). Those with family HDHPs may contribute up to $7,100 (up from $7,000). HSA holders age 55 or above will still be able to make additional catch-up contributions of up to $1,000 in 2020.
- Solo 401(k) holders under the age of 50 can make up to $19,500 in employee contributions in 2020 (up from $19,000 in 2019). Holders age 50 or above can make up to $26,000 in employee contributions (up from $25,000), which represents the new $19,500 limit plus a $6,500 catch-up contribution (up from $6,000).
- SIMPLE IRA holders may contribute up to $13,500 in 2020 (up from $13,000 in 2019).
- Traditional and Roth IRA contribution limits remain unchanged at $6,000, with the $1,000 catch-up contribution for holders age 50 or above remaining in effect.
Also note from the IRS publication that phase-out ranges—income levels at which the tax deductibility of Traditional IRA contributions and the overall ability to make Roth IRA contributions may be affected—have changed as well.
You can make 2020 contributions beginning January 1, 2020, and you have until your tax filing deadline (including any applicable filing extensions) in 2020 to make 2019 contributions. Please contact New Direction Trust Company at 877-742-1270 or firstname.lastname@example.org if you have questions.