3 New Startup 401(k) Tax Credits
When Congress passed the Secure Act 2.0 in December 2022, they introduced new tax credits and enhanced old tax credits for startup 401(k) plans for plan years 2023 and beyond. There are now 3 different tax credits that are available, all in the same year, for startup 401(k) plans that now only help companies to subsidize the cost of sponsoring a retirement plan but also to offset employer contributions made to the employee to enhance a company’s overall benefits package.
Mandatory Roth Catch-up Contributions for High Wage Earners - Secure Act 2.0
Starting in 2026, individuals that make over $145,000 in wages will no longer be able to make pre-tax catch-up contributions to their employer-sponsored retirement plan. Instead, they will be forced to make catch-up contributions in Roth dollars which means that they will no longer receive a tax deduction for those contributions.
Secure Act 2.0: Roth Simple IRA Contributions Beginning in 2023
With the passage of the Secure Act 2.0, for the first time ever, starting in 2023, taxpayers will be allowed to make ROTH contributions to Simple IRAs. Prior to 2023, only pre-tax contributions were allowed to be made to Simple IRA plans.
Self-Employment Income In Retirement? Use a Solo(k) Plan To Build Wealth
It’s becoming more common for retirees to take on small self-employment gigs in retirement to generate some additional income and to stay mentally active and engaged. But, it should not be overlooked that this is a tremendous wealth-building opportunity if you know the right strategies. There are many, but in this article, we will focus on the “Solo(k) strategy
401(K) Cash Distributions: Understanding The Taxes & Penalties
When an employee unexpectedly loses their job and needs access to cash to continue to pay their bills, it’s not uncommon for them to elect a cash distribution from their 401(K) account. Still, they may regret that decision when the tax bill shows up the following year and then they owe thousands of dollars to the IRS in taxes and penalties that they don’t have.
401K Loans: Pros vs Cons
There are a number of pros and cons associated with taking a loan from your 401K plan. There are definitely situations where taking a 401(k) loan makes sense but there are also number of situations where it should be avoided.
Can You Contribute To An IRA & 401(k) In The Same Year?
There are income limits that can prevent you from taking a tax deduction for contributions to a Traditional IRA if you or your spouse are covered by a 401(k) but even if you can’t deduct the contribution to the IRA, there are tax strategies that you should consider
Should You Make Pre-tax or Roth 401(k) Contributions?
When you become eligible to participate in your employer’s 401(k), 403(b), or 457 plan, you will have to decide what type of contributions that you want to make to the plan.
