Knowlopedia
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Tax laws are constantly changing, and it can be difficult to keep up with the most recent changes. It is important to stay informed of any new tax law updates so that you can take advantage of them or make sure you’re in compliance.
The Tax Cuts and Jobs Act (TCJA) was passed in 2017 and made some major changes to the U.S. tax code, including reducing individual income tax rates, increasing the standard deduction, eliminating personal exemptions, capping state and local taxes deductions at $10K per year for individuals filing jointly ($5K for single filers), limiting mortgage interest deductions on newly purchased homes to $750K (down from $1M), suspending miscellaneous itemized deductions subject to 2% AGI floor such as employee business expenses or investment fees/expenses; among other things.
In 2018 Congress passed a bill known as The Bipartisan Budget Act which included provisions related to retirement accounts such as allowing penalty-free withdrawals from retirement accounts for birth or adoption expenses up to $5K within one year of birth/adoption; allowing penalty-free distributions from IRAs after age 59 ½ if used towards medical insurance premiums during periods of unemployment; expanding 529 plans by allowing funds withdrawn for K-12 tuition payments up to a maximum amount of $10k per student annually; among other things.
The SECURE Act was signed into law in December 2019 which includes provisions that allow employers more flexibility when offering 401(k) plans by raising the cap on auto enrollment contributions from 10%to 15%; requiring employers who offer annuities through their 401(k)s must provide participants with lifetime income disclosure statements showing how much guaranteed monthly income they would receive upon retirement based on their current account balance; removing age restrictions on IRA contributions so anyone under 70 ½ can contribute regardless of earned income status; among other things.
It is important that taxpayers stay informed about these recent changes because they could potentially save money come tax time.
The Tax Cuts and Jobs Act (TCJA) was passed in 2017 and made some major changes to the U.S. tax code, including reducing individual income tax rates, increasing the standard deduction, eliminating personal exemptions, capping state and local taxes deductions at $10K per year for individuals filing jointly ($5K for single filers), limiting mortgage interest deductions on newly purchased homes to $750K (down from $1M), suspending miscellaneous itemized deductions subject to 2% AGI floor such as employee business expenses or investment fees/expenses; among other things.
In 2018 Congress passed a bill known as The Bipartisan Budget Act which included provisions related to retirement accounts such as allowing penalty-free withdrawals from retirement accounts for birth or adoption expenses up to $5K within one year of birth/adoption; allowing penalty-free distributions from IRAs after age 59 ½ if used towards medical insurance premiums during periods of unemployment; expanding 529 plans by allowing funds withdrawn for K-12 tuition payments up to a maximum amount of $10k per student annually; among other things.
The SECURE Act was signed into law in December 2019 which includes provisions that allow employers more flexibility when offering 401(k) plans by raising the cap on auto enrollment contributions from 10%to 15%; requiring employers who offer annuities through their 401(k)s must provide participants with lifetime income disclosure statements showing how much guaranteed monthly income they would receive upon retirement based on their current account balance; removing age restrictions on IRA contributions so anyone under 70 ½ can contribute regardless of earned income status; among other things.
It is important that taxpayers stay informed about these recent changes because they could potentially save money come tax time.
