The only constant in life is change, but some of these possible tax code changes will affect advisor planning in BIG WAYS!
Three health care taxes that were originally enacted as part of the 2010 health care reform legislation are slated for repeal as part of this year’s budget from Congress. As currently written, the new legislation provides changes to retirement plan rules, extends several expired tax provisions, provides disaster tax relief, and repeals the provision that taxed exempt organizations when they provided parking to their employees.
Highlights in that bill awaiting Trump’s signature;
- Increases the age after which required minimum distributions from certain retirement accounts must begin to 72 (from 70½);
- Modifies requirements for multiple-employer plans to make it easier for small businesses to offer such plans to their employees by allowing otherwise completely unrelated employers to join in the same plan;
- Allows penalty-free distributions from qualified retirement plans and IRAs for births and adoptions;
- Makes it easier for long-term, part-time employees to participate in elective deferrals;
- Requires beneficiaries of IRAs and qualified plans to withdraw all money from inherited accounts within 10 years (eliminating lifetime stretch for beneficiaries).
We will see very soon whether the final draft is signed as is, so stay tuned!
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