It’s Almost Tax Time… 100 Tax Changes Coming, are you Prepared?

It’s Almost Tax Time… 100 Tax Changes Coming, are you Prepared?

Congress just passed SECURE Act 2.0, which includes about a hundred changes and additions to the tax code. Here are the most important ones you need to know.

Key SECURE Act 2.0 Changes

Required Minimum Distributions (RMDs)

The age at which you must begin taking RMDs from your traditional IRA and 401(k) has been pushed back again:

• If you were born between 1951 and 1959, your RMD age is now 73.
• If you were born in 1960 or later, your RMD age will be 75.

This gives your tax-deferred accounts more time to grow. However, it also means more years of Roth conversion opportunity before RMDs force income into higher brackets.

Roth 401(k) Changes

Beginning in 2024, Roth 401(k)s will no longer be subject to RMDs during the owner's lifetime. This is a significant change that aligns Roth 401(k) accounts with Roth IRA rules and makes the Roth 401(k) a much more powerful planning tool.

Catch-Up Contribution Changes

Starting in 2025, workers aged 60–63 will be allowed to make "super catch-up" contributions to their 401(k) plans of $10,000 per year (or 150% of the regular catch-up limit, whichever is greater). This creates an important window for pre-retirees to accelerate savings in their final working years.

529 to Roth IRA Rollover

Beginning in 2024, unused 529 education savings account funds can be rolled over to a Roth IRA for the account beneficiary. The rollover is subject to annual Roth IRA contribution limits and a $35,000 lifetime limit, and the 529 account must have been open for at least 15 years.

Emergency Savings Accounts

Employers can now offer emergency savings accounts linked to their defined contribution plans. Employees can contribute up to $2,500 per year on an after-tax basis and make withdrawals without penalty for emergency expenses.

What to Do Now

With 100 changes in the new law, it's impossible to cover everything here. We recommend reviewing these changes with us at your next meeting to identify which ones apply to your situation. The goal is to find opportunities to save more, pay less in taxes, and build a stronger financial future.

Our team keeps its schedule flexible during tax season to be available to help our clients and their CPAs. Please feel free to reach out.