Quick Facts

Retirement Planning

Employee/individual contribution limits

Elective deferral limits 2019 2020
401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs 1 [Includes Roth 401(k) and Roth 403(b) contributions] Lesser of $19,000 or 100% of participant's compensation Lesser of $19,500 or 100% of participant's compensation
SIMPLE 401(k) plans and SIMPLE IRA plans1 Lesser of $13,000 or 100% of participant's compensation Lesser of $13,500 or 100% of participant's compensation

1 Must aggregate employee contributions to all 401(k), 403(b), SAR-SEP, and SIMPLE plans of all employers. 457(b) plan contributions are not aggregated. For SAR-SEPs, the percentage limit is 25% of compensation reduced by elective deferrals (effectively, a 20% maximum contribution).

IRA contribution limits 2019 2020
Traditional IRAs Lesser of $6,000 or 100% of earned income Lesser of $6,000 or 100% of earned income
Roth IRAs Lesser of $6,000 or 100% of earned income Lesser of $6,000 or 100% of earned income
Additional "catch-up" limits (individuals age 50 or older) 2019 2020
401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs2 $6,000 $6,500
SIMPLE 401(k) plans and SIMPLE IRA plans $3,000 $3,000
IRAs (traditional and Roth) $1,000 $1,000

2 Special catch-up limits may also apply to 403(b) and 457(b) plan participants.

Employer contribution/benefit 3 limits

Defined benefit plan limits 2019 2020
Annual contribution limit per participant No predetermined limit. Contributions based on amount needed to fund promised benefits No predetermined limit. Contributions based on amount needed to fund promised benefits
Annual benefit limit per participant Lesser of $225,000 or 100% of average compensation for highest three consecutive years Lesser of $230,000 or 100% of average compensation for highest three consecutive years
Defined contribution plan limits [qualified plans, 403(b) plans, SEP, and SIMPLE plans] 2019 2020
Annual addition limit per participant (employer contributions; employee pre-tax, after-tax, and Roth contributions; and forfeitures) (does not apply to SIMPLE IRA plans) Lesser of $56,000 or 100% (25% for SEP) of participant's compensation Lesser of $57,000 or 100% (25% for SEP) of participant's compensation
Maximum tax-deductible employer contribution [not applicable to 403(b) plans] 25% of total compensation of employees covered under the plan (20% if self employed) plus any employee pre-tax and Roth contributions; 100% for SIMPLE plans 25% of total compensation of employees covered under the plan (20% if self employed) plus any employee pre-tax and Roth contributions; 100% for SIMPLE plans

3 For self-employed individuals, compensation generally means earned income. This means that, for qualified plans, deductible contributions for a self-employed individual are limited to 20% of net earnings from self-employment (net profits minus self-employment tax deduction), and special rules apply in calculating the annual additions limit.

Compensation limits/thresholds

Retirement plan compensation limits 2019 2020
Maximum compensation per participant that can be used to calculate tax-deductible employer contribution (qualified plans and SEPs) $280,000 $285,000
Compensation threshold used to determine a highly compensated employee $125,000 (when 2019 is the look-back year) $130,000 (when 2020 is the look-back year)
Compensation threshold used to determine a key employee in a top-heavy plan $1 for more-than-5% owners, $180,000 for officers, $150,000 for more-than-1% owners $1 for more-than-5% owners, $185,000 for officers, $150,000 for more-than-1% owners
Compensation threshold used to determine a qualifying employee under a SIMPLE plan $5,000 $5,000
Compensation threshold used to determine a qualifying employee under a SEP plan $600 $600
Traditional deductible IRA income limits — Income phase-out range for determining deductibility of traditional IRA contributions for taxpayers covered by an employer-sponsored plan and filing as: 2019 2020
Single $64,000 - $74,000 $65,000 - $75,000
Married filing jointly $103,000 - $123,000 $104,000 - $124,000
Married filing separately $0 - $10,000 $0 - $10,000
Traditional deductible IRA income limits — Income phase-out range for determining deductibility of traditional IRA contributions for taxpayers not covered by an employer-sponsored retirement plan but filing a: 2019 2020
Joint return with a spouse who is covered by an employer-sponsored retirement plan $193,000 - $203,000 $196,000 - $206,000
Roth IRA compensation limits — Income phase-out range for determining ability to fund Roth IRA for taxpayers filing as: 2019 2020
Single $122,000 - $137,000 $124,000 - $139,000
Married filing jointly $193,000 - $203,000 $196,000 - $206,000
Married filing separately $0 - $10,000 $0 - $10,000

Protection Planning

Eligible long-term care premium deduction limits:

LTC premium deduction limits 2019 2020
Age 40 or under $420 $430
Age 41-50 $790 $810
Age 51-60 $1,580 $1,630
Age 61-70 $4,220 $4,350
Over age 70 $5,270 $5,430

Per diem limit:

LTC periodic payments 2019 2020
Periodic payments for qualified long-term care insurance/certain life insurance $370 $380

Archer Medical Savings Accounts

High deductible health plan--self-only coverage 2019 2020
Annual deductible--minimum $2,350 $2,350
Annual deductible--maximum $3,500 $3,550
Annual out-of-pocket expenses required to be paid (other than for premiums) can't exceed $4,650 $4,750
High deductible health plan--family coverage 2019 2020
Annual deductible--minimum $4,650 $4,750
Annual deductible--maximum $7,000 $7,100
Annual out-of-pocket expenses required to be paid (other than for premiums) can't exceed $8,550 $8,650

Flexible spending account (FSA) for health care

Health care FSAs 2019 2020
Maximum salary reduction contribution $2,700 $2,750

Health Savings Accounts (HSAs)

Annual contribution limit 2019 2020
Self-only coverage $3,500 $3,550
Family coverage $7,000 $7,100
High deductible health plan--self-only coverage 2019 2020
Annual deductible--minimum $1,350 $1,400
Annual out-of-pocket expenses required to be paid (other than for premiums) can't exceed $6,750 $6,900
High deductible health plan--family coverage 2019 2020
Annual deductible--minimum $2,700 $2,800
Annual out-of-pocket expenses required to be paid (other than for premiums) can't exceed $13,500 $13,800
Catch-up contributions 2019 2020
Annual catch-up contribution limit for individuals age 55 or older $1,000 $1,000

Estate Planning

Key indexed figures 2019 2020
Annual gift exclusion: $15,000 $15,000
Gift and estate tax applicable exclusion amount: $11,400,000 + DSUEA1 $11,580,000 + DSUEA1
Noncitizen spouse annual gift exclusion: $155,000 $157,000
Generation-skipping transfer (GST) tax exemption: $11,400,0002 $11,580,0002
Special use valuation limit (qualified real property in decedent's gross estate): $1,160,000 $1,180,000

1 Basic exclusion amount plus deceased spousal unused exclusion amount (exclusion is portable for 2011 and later years)

2 The GST tax exemption is not portable

2019 and 2020 gift and estate tax rate schedule

Taxable Estate Tentative Tax Equals Plus Of Amount Over
0 - $10,000 $0 18% $0
$10,000 - $20,000 $1,800 20% $10,000
$20,000 - $40,000 $3,800 22% $20,000
$40,000 - $60,000 $8,200 24% $40,000
$60,000 - $80,000 $13,000 26% $60,000
$80,000 - $100,000 $18,200 28% $80,000
$100,000 - $150,000 $23,800 30% $100,000
$150,000 - $250,000 $38,800 32% $150,000
$250,000 - $500,000 $70,800 34% $250,000
$500,000 - $750,000 $155,800 37% $500,000
$750,000 - $1,000,000 $248,300 39% $750,000
$1,000,000 + $345,800 40% $1,000,000
       
Credit shelter amount $11,400,000 in 2019 and $11,580,000 in 2020 Unified credit amount $4,505,800 in 2019 and $4,577,800 in 2020

Investment Planning

Maximum tax on long-term capital gains and qualified dividends

0% rate applies (taxable income thresholds) 2019 2020
Single Up to $39,375 Up to $40,000
Married filing jointly Up to $78,750 Up to $80,000
Married filing separately Up to $39,375 Up to $40,000
Head of household Up to $52,750 Up to $53,600
15% rate applies (taxable income thresholds) 2019 2020
Single $39,376 to $434,550 $40,000 to $441,450
Married filing jointly $78,751 to $488,850 $80,000 to $496,600
Married filing separately $39,376 to $244,425 $40,000 to $248,300
Head of household $52,751 to $461,700 $53,600 to $469,050
20% rate applies (taxable income thresholds) 2019 2020
Single Over $434,550 Over $441,450
Married filing jointly Over $488,850 Over $496,600
Married filing separately Over $244,425 Over $248,300
Head of household Over $461,700 Over $469,050

Unearned income Medicare contribution tax ("net investment income tax")

Amount of tax 2019 2020
Tax percentage 3.80% 3.80%
Applies to lesser of (a) net investment income or (b) modified adjusted gross income exceeding: 2019 2020
Individuals $200,000 $200,000
Married filing jointly $250,000 $250,000
Married filing separately $125,000 $125,000

Medicare 2020 Amounts

Part A Premium

$458.00

Most people do not pay a monthly premium for Part A. Deductibles and co-pays are reset each benefit period. A benefit period  begins the day you go to a hospital or skilled nursing facility. The benefit period ends when you haven't received any hospital care (or skilled care in a SNF) for 60 days in a row. If you go into the hospital after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period. There is no limit to the number of benefit periods you can have.

Deductible  1-60 days $1,408
Co-payment 61-90 days $352 a day maximum  of  $10,560
Co-payment 91-150 days $704  a day maximum of  $42,240
Co-payment 151 days or more You Pay All Costs
Skilled Nursing Confinement First 20 Days You receive 100% Coverage
Co-payment Days  21-100  $176 a day maximum of $14,080
When you are hospitalized for at least 3 days and enter a Medicare approved skilled nursing facility within 30 days after hospital discharge and are receiving skilled nursing care.
After 100 Days You Pay All Costs
Part B Monthly Premium
The standard Part B premium amount in 2020 will be $144.60. Most people will pay the standard Part B premium amount. If you modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you'll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA). IRMAA is an extra charge added to your premium

Individual Filer                                                     Joint Filer

Less than or equal to $87,000 Less than or equal to $174,000 $144.60 monthly
$87,001 - $109,000 $174,001 - $218,000 $202.40 monthly
$109,001 - $136,000 $218,001 - $272,000 $289.20 monthly
$136,001 - $163,000 $272,001 - $326,000 $376.00 monthly
$163,001- $499,999 $326,001 - 749,999 $462.70 monthly
Greater than or equal to $500,000 Greater than or equal to  $750,000 $491.60 monthly
Part B Deductible $198.00 annually

Click here for information on how to apply for Medicare Online
You may also visit a local Social Security Office or call Monday to Friday 7AM-7PM at  (800) 772-1213

Click here for more information on Medicare premiums.

Medicare Part D Prescription Drug Coverage Information

Source: Broadridge Investor Communications and  Medicare.gov

Tell A Friend