Tax Changes in Pension Act
The new pension act contains many provisions that will affect various facets of an individuals tax season planning. As an introduction to the changes, a Bankrate.com article describes 10 important new provisions, including automatic enrollment, easier rollovers to Roth IRAs and changes for charitable donations. To read more, go here.
An Investment Perspective
Fidelity.com offers an investment-minded perspective on the new law, analyzing the impact for investors of several of the act's provisions. The article covers IRAs, defined benefit plans, investment advice and insurance. To read it, go here.
The Impact on 529 Plans
Among many other changes, the Pension Protection Act made permanent the federal tax exclusion for qualified withdrawals from a Section 529 plan. This means that an individual who was uncertain about this option's future for younger children can now confidently add it to their college planning. For more information on the provision and on 529 plans, go here.
New Rules for IRAs
The law affects many aspects of IRAs, including provisions for nonspouse beneficiaries and changes in some contribution limits and some cost-of-living adjustments, according to an article on the Wolters Kluwer Financial Services Web site. To read it, go here.
Changes in Charitable Giving Rules
The act made many changes in the charitable giving area that are noted in other items in this newsletter. An additional one that might be overlooked is that, beginning in 2007, individuals will have new requirements for documenting the value of household goods or other items they give to charities. A Realty Times article describes the penalties for those who don't have proof of value and provides a link for the appropriate IRS forms and publications. It can be found here.