Starting in 2026, people over 50 will have to make catch-up contributions to Roth 401(k)s. The was previously slated to change in 2024.
The Internal Revenue Service delayed the start date of a new rule that will require higher earners’ catch-up 401 contributions to be made on an after-tax basis into a Roth account, rather than pretax.
The 401 contribution limit this year is $22,500. Folks ages 50 or older can kick in an additional $7,500 contribution for a total of $30,000. Contributions to 401s and similar employer plans usually are made on a pretax basis, so money socked away reduces annual taxable income. The trade-off for this tax break is that any assets withdrawn from a 401 are taxed at income-tax rates.
Pretax contributions will still be allowed up to the standard annual 401 contribution limit, but higher earners will have to pay taxes up front on any catch-up contributions. Assets in the 401s Roth account—-both the principal and any growth—can be withdrawn tax-free after age 59 1/2.When Congress passes a bill with tax breaks, it aims to offset the revenue loss for the government with changes that will bring in money. The Secure Act 2.
Argentina Últimas Noticias, Argentina Titulares
Similar News:También puedes leer noticias similares a ésta que hemos recopilado de otras fuentes de noticias.
Here’s how much 401(k) contribution limits are likely to rise next yearThe tax-deferred amount you will be able to contribute to your 401(k) plan in 2024 is likely to rise by just $500, or 2.2%, according to a forecast from...
Leer más »
IRS delays change for 401(k) catch-up contributions. Here's what higher earners need to knowIRS has delayed the ‘Secure 2.0’ change for 401(k) catch-up contributions. Here’s what higher earners need to know.
Leer más »
IRS Delays Changes for 401(k) Catch-Up Contributions. What You Need to Know.Starting in 2026, people over 50 will have to make catch-up contributions to Roth 401(k)s. The was previously slated to change in 2024.
Leer más »
Burger King Just Launched 3 New Breakfast Items—But There’s a CatchThe menu additions give Burger King customers three savory new options to choose from for their morning meals.
Leer más »
How to navigate the new rules for old mattresses in the Boston areaDon't curb your old mattress: Under new state rules that took effect last November, mattress recycling is now the law in Massachusetts. Here's what Boston-area residents need to know about the new regulations and how to get your mattress recycled ahead of a move.
Leer más »