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What’s Old is New Again

By Ken Vander Kooi, CFP®February 1, 2019Financial Planning

Each year the IRS and various other agencies update many of the various limits/exemptions/rules related to financial products, income taxes, wealth transfers, etc. 2019 is no exception to this. As such, below is a partial listing of some of the changes coming into effect this year:

The limit for contributions to an IRA for 2019 has increased to $6,000 (from $5,500 in 2018). For those over the age of 50, the contribution limit is now $7,000, including the “catch-up” contribution.

Employee contributions to 401k, 403b and most 457 plans have increased to $19,000 for 2019 (was $18,500 last year). For 401k participants over age 50, an additional $6,000 can be contributed annually as a “catch-up”.

The annual gift exclusion remains the same as last year at $15,000 per recipient per year. For example, a married couple with 2 children could gift a total of $60,000 to their children in 2019 ($15,000 to each child from each parent). While gifts above the annual exclusion may still be given, they may serve to reduce your lifetime gift & estate tax exclusion.

The lifetime gift and estate tax exemption has increased to $11.4 million per individual (from $11.18 million in 2018). For individuals passing away with net estate assets above the exemption amount, estate taxes may be owed.

The standard monthly premium for Medicare part B has increased by $1.50 per month to $135.50 in 2019. This premium amount applies to Medicare recipients with income less than $85,000 if single and $170,000 if married filing jointly. Premiums increase for recipients with income above those amounts, topping out at $460.50 per month for single taxpayers with income of more than $500,000 per year and $750,000 for those married filing jointly.

The annual deductible for all Medicare part B beneficiaries has increased $2 to $185 for 2019.

For golfers – no matter how a club is damaged, even by abusing it, the player can continue to use the club in its damaged state for the rest of the round, but he/she will NOT be allowed to replace it (2019 USGA rule change). Good news for those of us with rogue clubs (or skills not quite ready for the PGA tour).

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