The need for more robust retirement savings for workers is an issue which has been top of mind for legislators over the last several years. Broader access to employer sponsored retirement savings plan along with reduced hurdles to participation are just two of the many issues that have to be considered. Last December, Congress passed the Consolidated Appropriation Act of 2023, which included the SECURE Act 2.0. This legislation, named after the original SECURE Act passed in 2019, delivers several reforms and updates to benefit workers and make it less burdensome for small employers to offer retirement plans. While these reforms offer some measure of relief, many states have elected to make further changes.

Small businesses are an essential part of New Jersey’s economy, providing needed products and services and creating important employment opportunities. The Garden State ranks 11th in the number of small businesses within its borders, totaling just under 908,000 enterprises. In fact, 99.6% of companies located within the state are small businesses, accounting for 49% of the overall employment. Those with 20 employees or less constitute the largest share of small business employment of these companies.

On the seventh day of Taxmas, my accountant gave to me an annual reminder to review beneficiary designations for retirement accounts, annuities, and life insurance contracts.

On the fourth day of Taxmas, my accountant gave to me a reminder that Required Minimum Distributions (RMDs) are required in 2021 for anyone who has reached age 72 during the year or reached 70 ½ before 2020.  In 2020, RMDs were not required due to the COVID-19 pandemic. 

On the third day of Taxmas, my accountant gave to me a backdoor Roth IRA conversion before they are disallowed in the Biden Administration’s proposed legislation, the Build Back Better Act.  Under current law, if you contribute to non-deductible traditional IRA accounts, you can wait a few days then convert that contribution to a Roth IRA account. Therefore, the only taxable income would be any income earned when the funds were in the Traditional IRA.    

When you reach a certain age, you are required to take distributions from your retirement account. These “required minimum distributions” (RMDs) vary based on age, life expectancy, working status, and account balance, and those who fail to take all that they’re required will pay a hefty penalty. Unfortunately, there’s no way to skirt the RMD rules, but there is something you can do with RMD funds that you don’t need: donate them to charity.

Taxes play a significant role when we invest in retirement. One possible way to minimize taxes is by investing in a Roth IRA. With a Roth IRA, you contribute after-tax dollars and withdraw the contributions and any earnings tax-free in retirement.

Angela Lawrence, Quality Control Coordinator at Klatzkin, contributed to this post. With the calendar turning to January 2021, new standards came into effect that impact taxpayers who use their vehicles for specific purposes or contribute to retirement accounts.  Let’s look at changes related to standard mileage rates and retirement accounts in 2021, as announced by […]

In the fall of 2020, I wrote about whether one should choose to waive or not to waive part of or all of one’s requirement to take a Required Minimum Distribution (RMD).  More than likely, that will not be an option for 2021.

The 2020 Presidential election has come and gone.  We will likely have a new president.   The coronavirus is still with us and is threatening to shut down significant parts of the country.