Effective January 1, 2020, a new law went into place called the SECURE Act (signed on December 20th, 2019). The SECURE Act made many changes to our current retirement laws. Here are some highlights:
- Under old law, you could not make contributions to a Traditional IRA once you turned 70 ½.
- Under new law, you can continue to make contributions to a Traditional IRA past age 70 ½ as long as you have earned income at least equal to the contribution. You can even continue to save while simultaneously taking RMDs!
- Under old law, you were required to start taking RMDs when you reached age 70 ½
- Under new law, you’re not required to start taking RMDs until you turn 72.
- Under old law, a small business could receive a $500 tax credit for starting a new retirement plan.
- Under new law, the credit is now $5,000, and can be claimed for three years in a row.
- Bonus, if the small business sets up automatic enrollment for its employees, there’s an extra $500 tax credit available.
- Under old law, money in a 529 plan could be used for tuition, books, room and board, as well as tuition at an elementary, secondary, or religious school.
- Under new law, you can also use up to $10,000 to repay qualified student loans.
These are just a handful of changes implemented with this new law. Your Tax Strategist will discuss these provisions and others that may apply to you during the tax season. Need an appointment? Making one is easy! Just schedule online, or call (520) 321-4626.