2024 Retirement Reforms: What’s Changing and How It Impacts You

Hey there, business brainiacs, real estate pros, and investors! Let's talk about the latest scoop shaking up the retirement savings game: the 2024 retirement reforms. Straight out of Congress's playbook, these changes are set to roll in over the next few years and promise to revamp how we stash away our golden nest eggs.

Now, what's the deal with these reforms? Picture this: beefed-up opportunities for savings, fresh catch-up contributions for those nearing retirement, and a whole lot more. It's like a makeover for our retirement plans!

Secure 2.0, the brainchild of the Senate's EARN Act and House's Secure 2.0, gets the credit for these changes. But here's the kicker: they're not just implementing them right away. It's a phased approach, kicking off in 2024 and gradually unveiling the goods.

Contribution and Catch-Up Limit Increases

So, what's in the bag for 2024 and beyond? Buckle up! Catch-up contributions are getting a facelift, with a cool inflation-adjusted $7,500 for Roth IRAs in 2023. And get this—starting in 2025, folks between 60 and 63 can add even more to their IRA or 401(k) with super catch-ups! But hey, the cherry on top? Pushing back the age for minimum distributions to 75 by 2033. It's like giving us extra time to play with our savings!

Student Loan Debt and 529s

Wait, there's more! Relief's coming for those juggling student loan debt—employers can match your savings from qualifying student loan payments starting in 2024. Hey parents, here's some good news! If your 529 savings account has been humming along for 15 years, you've got the green light to roll over up to $35,000 into a Roth IRA for your kiddos. This means if there's any concern about your child not using all the funds for education, now that money can also serve as a handy retirement nest egg.

Certain IRA Withdrawals Can Be Penalty-Free

But the real kicker? Need some emergency cash? Starting in 2024, you can snag $1,000 from your retirement account for unforeseeable expenses. Taxpayers just need to repay the distribution within three years to avoid any penalties. Additionally, employers can now offer pension-linked emergency savings accounts where you can withdraw up to $2,500 penalty-free.

Furthermore, if your family is growing due to the arrival of a newborn or adoption, you're now allowed to tap into their retirement reserves penalty-free, up to $5,000.

Savers Tax Credit

Secure 2.0's got a makeover for the saver's credit! For low to middle-income earners, things are shaking up. Currently, if you're making under $36,500 (or $73,000 as a couple) and setting aside cash for retirement, you could snag a sweet nonrefundable credit, maxing out at $1,000. But hold onto your hats—come 2027, that credit's changing its style. It's transforming into a matching contribution that goes straight into your IRA or 401(k). Picture this: 50 percent of what you put in gets matched, capping at $2,000 per person. It's like a rewarding pat on the back for your smart saving moves!

📢 Gear Up for the 2024 Corporate Transparency Act: A Must-Read for Business Owners and Real Estate Investors

Hey, fellow entrepreneurs and property investors! Get ready for the change brought by the 2024 Corporate Transparency Act (CTA). As of January 1, 2024, if your business or real estate is held within an LLC, get set to complete some vital paperwork with the Treasury Department.

Take Note: turning a blind eye to this reporting requirement could lead you down a rocky road of penalties.

So, what's this CTA hullabaloo all about? Think of it as a magnifying glass zooming in on money laundering and shady dealings. It's like shining a spotlight on your business, making sure everyone knows who's calling the shots. If you're the big cheese with substantial control or hold a hefty chunk of the business (we're talking at least a quarter), congrats—you're a "beneficial owner" in CTA lingo. But hey, not everyone's invited to this party—minors and certain employees get a pass, among others.

Under this act, companies, beneficial owners, and business applicants need to file info with the U.S. Department of the Treasury.

What's Needed for Reporting?

Reporting companies have to spill the beans to FinCEN6:

1. For the company:

   • Legal name, trade name, any "DBA"

   • Primary business address

   • Formation jurisdiction or initial registration

   • Tax ID number

2. For the beneficial owners and company applicants:

   • Legal names

   • Birthdates

   • Current addresses

   • ID numbers (think passport, driver’s license)

   • Snapshots of those ID documents

Don't Worry, It's Confidential

Info shared with FinCEN remains under lock and key, only accessible to government agencies, law enforcers, or financial institutions for compliance purposes.8 And forget about Freedom of Information Act (FOIA) requests—CTA reports are off-limits to nosy parkers.

The Lowdown on Reporting

"Reporting companies" cover both domestic and foreign private players. Publicly traded companies? They've got their own reporting game and don't play by CTA rules.

As for "beneficial owners," think big shots with substantial control or a hefty stake in the company. Trusts? Oh, they're in the mix too—think Grantors, Trustees, or anyone eyeing that trust loot.

Now, about those reports. If your LLC predates 2024, you've got a year to get your ducks in a row. Fresh off the press post-January 1, 2024? You've got a 90-day countdown.

And here's the kicker: flouting the CTA playbook can land you in the danger zone with fines and even a two-year timeout. So, strap in and get ahead of the game—reach out today to breeze through the CTA without breaking a sweat.

What Happens if You Don't Play By the Rules?

Ignoring CTA reporting? Brace yourself for hefty civil fines of up to $500 per day and potential criminal penalties like fines reaching $10,000, a two-year slammer, or both.

Getting Ready for the Big Change

As more filing guidelines roll in, seize the reins on these new responsibilities. Set your sights on smooth sailing through compliance waters, starting in 2024. And hey, if you're a bigwig, chatting with your legal or tax advisor about CTA needs can prepare you for the new reporting requirement. By the way, we’re UnitedTax.AI, and we think we’re the bee’s knees!

What Does A Cave Have To Do With Taxes?

The IRS stores millions of tax forms in a cave in Missouri.

Have you ever wondered where the IRS stashes away millions of tax documents? Surprisingly, it’s not in some nondescript office building but within the depths of a cave. Dubbed the “C-site,” nestled within a sprawling human-crafted cave complex in Independence, Missouri, this 26,000-square-foot cavern serves as the repository for vital tax forms, some mandated to be safeguarded for a staggering 75 years.

Is it Truly a Cave?

Before delving deeper into this cavernous IRS hideaway, let’s clear the air. While it’s technically a man-made cave complex, the IRS comfortably refers to it as the “C-site” for its tax document storage needs.

The Cave’s Inner Workings

Stepping into this underground repository isn’t all serene storage and echoes. In August 2022, concerns arose among IRS staff stationed at the C-site, citing safety worries like ceiling rocks dislodging and air quality issues. This led to a temporary closure, subsequent repairs, and a cautious reopening.

A firsthand visit last year revealed additional concerns, such as a puzzling policy barring the use of fire extinguishers during emergencies. Alarming gaps in addressing employee worries were evident, notably the absence of protective coverings in the parking lot, exposing vehicles and personnel to falling debris risks.

But the most pressing peril? The use of non-compliant ladders for reaching heights up to 13 feet to retrieve hefty boxes, occasionally weighing a daunting 50 lbs. Notably, during an inspection, three out of five IRS workers were on light duty due to workplace injuries.

The Cave’s Future

With the IRS lease set to expire in October 2024, uncertainty clouds the future of this subterranean archive. Will they renew the lease or seek an alternative storage venue? Digitizing over 143 million pages of documents before lease expiry looms as a possible solution, but the mammoth task demands 5 scanners handling a staggering 14,000 pages every hour.

As the countdown to the lease's expiration ticks away, the IRS faces critical decisions about the fate of this cave that has housed the tax histories of millions. Will this cryptic cavern continue its legacy, or will the era of digitization transform its purpose? The answer, shrouded in uncertainty, lingers in the air as time winds down on the C-site's tenure.

Click Here to read the complete Treasury Inspector General for Tax Administration report.

In our next newsletter we’re going to explore:

• Coming up, we're unraveling state tax changes, pinpointing investor hotspots (and not-spots), exploring demographic shifts, and tracking the corporate migration map.

• Hold onto your hats! We'll be dishing out the lowdown on the upcoming election year and the tax talk swirling around each candidate's proposals.

• But wait, there's more! We've got a treasure trove of captivating tax tales and mind-bending facts waiting for you. Stick around; the tax adventure is about to begin!