You’ve got to hand it to these people– Congress really knows how to bring out the holiday cheer.
They have some sort of pathological need to pass the most absurd legislation at the VERY END OF THE YEAR giving people very little time to react.
Two years ago, for example, they passed comprehensive tax reform in late December 2017… and the new tax code went into effect only a few days later.
Taxpayers had no time to even understand the new law, let alone plan around it.
That’s the funny thing about taxes– people plan their entire lives around the tax code.
They set up special structures, invest in particular assets, and go through all sorts of legal and accounting work, to make sure they’re following the tax code while they take care of their families.
And then, poof, Congress changes the rules overnight.
Well they just did it again.
A few days ago they passed a 643-page spending bill. And, buried deep within that legislation are provisions that were originally part of the SECURE Act.
I told you about this a few months ago– the SECURE Act was intended to ‘help’ Americans save for retirement. And there are certain sections which are great.
For example, they removed the age limit for contributing to an IRA. It used to be that you could no longer contribute to your retirement after the age of 70 ½.
That limit has been lifted… which should prove useful for many people.
They also increased the age for Required Minimum Distributions to age 72, up from age 70 ½. So you have an additional 18-months before you’ll be required to start taking distributions from your retirement account.
On the other...