What’s New in 2019 for Small Business Owners

If you’re a business owner choosing a retirement plan can be challenging. Staying on top of it can be even more of a challenge. If 2018 was a great year for your business then you might be looking to increase your retirement contributions this year. Are you wondering “What is the maximum I can save into my Small Business Retirement plan?” If so, then you’ve come to the right place. Here’s a break down of the new contribution limits of some popular retirement plans for SBOs:

SIMPLE IRA employee contribution limits have increased from $12,500/yr. to $13K/yr. along with a $3K/yr. catch-up contribution for individuals age 50 and older.

Individual 401(k) employee contribution limits have increased from $18,500/yr. to $19K/yr. A catch up contribution of $6K/yr. is allowed for individuals that are age 50 and older. (Note that this new limit applies to the total of your pre-tax both and Roth contributions.) An employer contribution is still available up to a maximum total contribution (including employee and employer funding) of $56K/yr. which is up from $55K in 2018.

SEP IRA employer contributions can’t exceed the lesser of 25% of an employee’s income or $56K/yr. (increased from $55K in 2018). Please note that catch-up contributions and employee contributions still aren’t allowed into a SEP IRA.

Now that you know what’s new in 2019 I recommend that you take a look at your financial plan to see if you should adjust your contributions. While you’re at it you should take a look at 2018 to see if you if you’re all set or if you still need to make additional contributions. Many small business retirement plans allow contributions up until the tax deadline (including extensions) so there may still be time to contribute. Do you have a game plan in place for your small business? Need help with your plan for 2018, 2019, or both? CLICK HERE to see if we can help.

Make sure to check out Part 1 (401k) and Part 2 (IRAs) of this series as well!

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Jessica Merino is a registered representative of The Investment Center, Inc. – Merino Wealth Management is not affiliated with The Investment Center, Inc. or IC Advisory Services, Inc..