Third Time’s a Charm on Tax Legislation

The House voted 401-25, which of course means that Republicans and Democrats alike are in the same camp on this one, to increase the annual contribution limits to the nation’s most popular retirement plans, the IRA and the 401(k). The limits, if the bill becomes law, would raise from $2,000 to $5,000 for IRAs and from $10,500 to $15,000 for 401(k) plans.

Although the plan would phase in over 10 years, people over age 50 would have special privileges that would enable them to contribute more rapidly, thus paving the way for a generation of baby boomers that actually might find itself prepared to care for itself in retirement.

Congress expects that the bill would reduce tax revenue to the government by $52.2 billion over the 10 year initiation period, but forward-thinking people have always known that increased retirement savings for the nation’s aging population will mean the amount of necessary government benefits to care for these people will also be reduced.

The White House is pressuring Congress to add language to the bill that would provide for an annual retirement account subsidy of $1,000 in the form of a matching funds tax credit for wage earners whose annual income is beneath $37,500. The thinking is that these people are less likely to save and perhaps more likely to require government benefits in their old age.

Click here to read the entire bill.

You may like these other stories...

Tesco accounting probe finds “inappropriate behavior” by staff – reportsClare Hutchison of Reuters wrote on Sunday that an investigation into a 250 million-pound ($402 million) profit overstatement at...
Did you ever feel as if you're preparing taxes in the Twilight Zone? You may be more right than you think. Each year, professional preparers all over the country have to work in a shadowy reflection of the normal tax...
The split over convergenceDavid M. Katz of CFO wrote an interesting article on Thursday about the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) backing away from their...

Already a member? log in here.

Upcoming CPE Webinars

Oct 21Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience’s communication style.
Oct 22This webinar will include discussions of important issues in AU-C 800, Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.
Oct 30Many Excel users have a love-hate relationship with workbook links.