In this podcast, Melissa West, a Manager of Tax Services at GSG, discusses how the SECURE Act will help individuals save more for retirement.
In late December 2019, the Setting Every Community Up for Retirement Enhancement Act, also known as the SECURE Act, was passed by Congress. The new legislation is the most extensive retirement act since the Pension Protection Act of 2006.
Changes affect both individuals and businesses when it comes to tax savings and retirement planning. Notable features in the new act include:
- The age limit for making traditional IRA contributions has been eliminated, so now anyone of any age can contribute to a traditional IRA, provided they have earned income.
- An increase in age for the required minimum distributions (RMDs) from 70 ½ to 72 for all retirement accounts subject to RMDs, an advantage to most taxpayers who are able to afford delaying a withdrawal.
- Part-time workers soon may be eligible to contribute to 401(k) plans.
- Businesses are able to receive a tax credit to assist in covering the cost of starting an automatic enrollment retirement plan.
- Small businesses can join together to establish a shared 401(k) plan known as a Multiple Employer Plan (MEP), allowing small employers to setup and offer 401(k) plans with fewer costs and less fiduciary liability concerns.
The podcast also discusses how the SECURE Act improves tax savings through previous tax legislation by changing the kiddie tax and eliminating the “parking tax” for nonprofits.
The SECURE Act is extensive and complicated, and many of the new regulations require tax planning strategies. Contact us today for more information on how to make your tax situation less burdensome.Categories: Tax, Small Business, Tax Planning, Employee Benefit Plans, Retirement Planning