For 2019 the contributions limit for employees and self employed to participate in retirement plans such as 401(k), 457, tsp and 403(b) has increased by an extra $500 to $19,000. Also, IRAs have increased to $6,000 per year which has also increased by $500. This basically equals an extra $500 tax liability saving if you make contributions at the limit.
For those whom are employed and self employed you can contribute to your employers retirement plan ( and you will want to do this to their percentage of match) and your self employment plan. You want to make sure that you are not exceeding the limit in your combined contributions.
For example if you get paid $150,000 per year as an employee and you put 10% of your earnings in your 401(k), then you can only contribute $4,000 from your self employed since your combined contribution can't exceed $19,000 per year!
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Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion. Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.