Larger IRA and 401(k) Deductions in 2019
The IRS just released some new inflation adjusted numbers and one major change is that farmers can put more into an IRA or 401(k) plan.
In 2019, a farmer can put $6,000 into and IRA plus another $1,000 if age 50 or over. Married couples who are each 50 or older, can now set aside $14,000 into IRAs.
Farmers who participate in a 401(k) plan can now defer $19,000 from their salary plus if age 50 or over additional $6,000 for a total of $25,000. The maximum amount that can be contributed per participant including the owner increases from $55,000 to $56,000.
Many farmers view their farm land as their retirement plan, but most should certainly consider either contributing to a regular or Roth IRA each year. This can help make it much easier to transition the farm operation to the successors and make your retirement years much better.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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