Senate Finance Committee unanimously approved a bipartisan bill layout – improved savings and retirement Act 2016 – to make some changes in the pension provisions of the tax legislation.
For example, in accordance with the present law, a person who has reached the age of 70.5, before the end of the year can not make contributions to a traditional individual retirement account (IRA). The law will revoke this ban.
Ron Wyden (D – OR), Ranking Member of the Committee, said that the renewal provisions of the retirement age “is essential, especially because so many Americans are living longer, if they can afford to save for retirement, they must get permission to do that” .
The second proposal is to change the calculation of the dollar limit amount on a non-refundable tax credit, currently provided for beginners small entrepreneur’s cost adopted new qualified pension plan, a simple IRA plan (or SEP), provided that the cover of the plan, at least one is not of the strongest workers’ compensation.
Calculation of the three-year loan, currently less than USD500 per year, or 50 percent of qualified start-up costs. Under the proposed changes, a fixed amount of dollars for the fiscal year will be more (1) USD500 or (2) the amount that is less than (a) USD250, multiplied by the number of workers who are not highly compensated employees, and who are eligible to participate in the employer’s plan, or (b) USD5,000.
And finally, as an administrative improvement, the law should establish that, if the employer receives a promotional bonus, pension, profit sharing, or plan an annuity after the close of the taxable year, but prior to the expiration of statutory deadlines for filing the return to the employer during the tax year, the employer can choose to treat the plan as if it was adopted on the last day of the tax year.