Don’t look now but another tax bill is working its way through the House Ways and Means Committee. If passed in its present form, it makes additional changes to retirement plans (among other things), including IRAs and 401(k) plans.
The bill also includes technical corrections to the Tax Cuts and Jobs Act of 2018 law, as well as extending certain provisions of the tax code that are scheduled to expire at the end of 2018.
The key retirement provisions in the bill include the following:
- Allows contributions to traditional IRAs past age 70 ½
- Permits penalty-free withdrawals up to $7,500 from retirement accounts upon the birth or adoption of a child
- Eliminates Required Minimum Distributions for taxpayers with IRA account balances of $50,000 or less
There is also a provision in the bill to allow start-up businesses to immediately deduct up to $20,000 in start-up expenses. Currently, start-up expenses are capitalized and are not deductible.
It is still too early to tell whether the bill – named the “Retirement, Savings, and Other Tax Relief Act of 2018” – will pass, although the Republicans do still control both Houses of Congress until January 3. We will continue to monitor the bill and will let you know how it may affect you and your family, should it pass.