Tax Rates & Retirement Contribution Limits For Individuals & Married Filers in 2019

As we begin gathering up tax documents in anticipation of filing 2018 tax returns, it is also a good time to look ahead to our expected tax liability for 2019. Now is the perfect time to make any adjustments to withholding rates or retirement contributions for this year.

Each year, the IRS adjusts tax brackets to account for inflation. The following brackets took effect on January 1, 2019.

New Federal Tax Rates for 2019 for Individuals and Families

Marginal Tax RateSingle (Unmarried) FilerMarried Filing Jointly
10%$0 - $9,700$0 - $19,400
12%$9,701 - $39,475$19,401 - $78,950
22%$39,476 - $84,200$78,951 - $168,400
24%$84,201 - $160,725$168,401 - $321,450
32%$160,726 - $204,100$321,451 - $408,200
35%$204,101 - $510,300$408,201 - $612,350

Note: These tax rates are marginal, meaning your income at each level is taxed at that rate. Putting aside other variables for a moment (such as capital gains that are taxed at a different rate, AMT/Pease, Medicare Net Investment Income Tax, etc.) a household with taxable income (after adjustments and deductions) of $240,000, for example, would have a federal tax due of $45,949, or an effective tax rate of 19.15%, less than its marginal tax rate of 24%.

Income amounts in the table above reflect taxable income. Taxable income is your Adjusted Gross Income (AGI) minus your Standard or Itemized Deduction. As noted in previous posts, the tax law changes in 2018 mean that many more taxpayers will be filing using the standard deduction. The standard deduction has also been adjusted for 2019.

Standard Deductions for 2019

Filing Status20182019
Single (Unmarried) Filer$12,000$12,200
Married Filing Jointly$24,000$24,400

Retirement Contributions for 2019

Retirement contributions limits have increased by $500.

  • IRAs: $6,000 (up from $5,500 in 2018), plus an additional $1,000 catch-up contribution for those age 50 or older ($7,000 total)
  • Employer-sponsored plans (e.g., 401(k), 403(b), 457): $19,000 (up from $18,500 in 2018) plus an additional $6,000 catch-up contribution for those age 50 or older ($25,000 total)

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Rebecca is a tax and financial planning practitioner with Callahan Financial Planning Company, serving clients in San Rafael, San Francisco, and Mill Valley in Northern California, in Omaha and Lincoln in Nebraska, and in the Denver metro area in Centennial Colorado.