Year-end is fast approaching and you are probably wondering how to get the most out of your annual giving or what to do for investing or adding funds to an individual retirement account (“IRA”). It makes a lot of sense to measure your contributions against the allowable Internal Revenue Service (“IRS”) limits, while there is still time to make an adjustment, before the end of the year.
Some reminders or things to check out include:
- 401(k) Plan – The most an employee can contribute to a 401(k) for 2019 is $19,000 and you have until December 31 to do so. If you are over age 50, you can contribute an additional $6,000. Reach out to your Human Resource department to increase your contribution between now and the end of the year.
- IRA – The maximum IRA contribution for 2019 is $6,000. If you are over age 50, you can add another $1,000 per year. You have until tax filing date to make IRA contributions. This is true for both Traditional IRA’s and Roth IRA’s.
- Health Savings Account (“HSA”) – A family can contribute up to $7,000 and an individual can contribute $3,500 per year to a HSA. You must make this contribution by December 31. If you are 55 or older anytime in 2019, you can contribute an extra $1,000.
- Use any remaining flexible spending account (“FSA”) money you have allocated for the year. One of the downsides to an FSA account is that money is often “use it or lose it”. This means any money still in the account at the end of the year is gone forever. While there is still time, check your balance and order that new pair of glasses or schedule a checkup. Be sure and check out your plan’s rules. Not all FSA’s are 100% use it or lose it. Some offer a grace period and others allow you to rollover $500 for the next year.
- Take the required minimum distribution (RMD) from your retirement plan if you turned age 70 1/2 this year, or are older. Your financial advisor can calculate the amount you are required to take. The first year you reach the RMD age requirement, you have up until your tax filing date of the following year. All other years, your deadline is December 31st. Penalties are stiff, so it is always a good idea to consult a tax expert.
You still have time to make a contribution for 2019.
Our Stockman Wealth Management team is more than happy to help answer any of your questions.
Give us a call today!