2019 Tax Phase-Out Levels: What You Need to Know

Certain tax deductions, contribution limits, and phase-out levels are adjusted each year. Looking ahead, here are some of the most common for 2019:

Contribution Limits to Retirement Plans

Funding your own retirement is a must for most taxpayers since traditional pensions are rare and Social Security alone is not expected to cover your expenses. According to the Social Security website, Social Security retirement benefits may represent around 40% of the income needed to cover your post-retirement expenses. With that in mind, here are retirement plan contributions for some of the more common plans in 2019:

Under Age 50:

  • 401K & 403(b): $19,000

  • SIMPLE deferral: $13,000

  • IRA (traditional, nondeductible, or Roth): $6,000

Age 50 and Older:

  • 401K & 403(b): $25,000

  • SIMPLE deferral: $16,000

  • IRA (traditional, nondeductible, or Roth): $7,000

Contribution Limits to Health Care Plans

Take advantage of pre-tax contributions to fund out-of-pocket medical expenses. Make sure you know what you are funding. A Flexible Spending Account (FSA) needs to be spent down, while a Health Savings Account (HSA) can build up over time and may be available in retirement to fund Medicare premiums. Also, paying your out-of-pocket medical expenses with these funds is not deductible since you can’t get both pre-tax treatment and a deduction, but that’s all right.

  • FSA Accounts: $2,700

  • HSA contribution limits — Self-only plans: $3,500; Family: $7,000

  • HSA Catch-up Contributions (Age 55+): $1,000


Certain credits relate to children under certain ages or are related to the expense of adopting a child.

  • Maximum Child Tax Credit: $2,000 (no change)

  • Maximum Adoption Credit: $14,080

Social Security-Related

While working, you pay into Social Security. If you are an employee, 7.65% of your wages (caps apply, see below) are withheld and your employer also pays in an additional 7.65%. If you are self-employed, you pay 15.3% of your net income (reported on your personal income tax return).

  • Maximum wages subject to Social Security tax: $132,900

  • Maximum earnings when receiving Social Security benefits before full retirement age: $17,640

  • Maximum earnings in the year of full retirement age: $46,920

  • Maximum Social Security monthly benefits at full retirement age: $2,861

Standard Mileage Rates

If you drive your car for business purposes and keep track of your mileage, you may use the standard mileage rate shown below. Mileage for charitable purposes has not changed.

  • Business Use: $.58 per mile

  • Charitable Use: $.14 per mile (no change)

Contact me today if you have questions or comments.

Susan A. Moussi, CPA, CFP®, CDFA SMD Tax & Divorce Financial Planning Consultants, Inc. Phone: 614.429.4172 susan@smdtaxanddivorce.com