How to Handle 2014 Tax Planning in a Lame Duck Congress

November ushered in the 2014 lame duck session of the 113th Congress. It has implications for everything from Ebola, to immigration, to tax breaks. While all of these issues are pressing, for expanding and emerging businesses and their owners, it is those pieces of tax legislation that imply direct, material impact. What is a lame duck?  Let’s start from the top. What is a lame duck? It’s a funny term for a not-so-amusing situation. A lame duck is a politician who is on his or her way out of office (currently, there are 85) and who therefore is unable to effect change. A lame duck session is the window of time during which one Congress meets after its successor is elected, but before the new Congress convenes the following January. The 2014 lame duck session is significant because Democrats are the sitting members of the existing Congress, and the new Congress has a Republican majority. Change is afoot, and there is real concern about whether they will be able to get anything … [Read more...]

Good News about Allowable Contribution Limitations

Tax Year 2015 Allowable Contributions

Between 2013 and 2014, business owners and wage-earning employees saw almost no increases in allowable contribution and elective deferral limitations. Tax year 2014 was characterized by increased tax rates, increased wage limits for social security tax and numerous other indexed items. These limitations effectively took more out of tax payers take home pay, and did not increase the amount someone could save for retirement, tax deferred. We’re due for some good news, and it has arrived. Uncle Sam is helping us keep a little more of our earnings. In October, the Internal Revenue Service announced cost‑of‑living adjustments for tax year 2015. These changes impact the dollar limitations for pension plans and other retirement plan contributions. The change comes as a result of the cost-of-living index, which met statutory thresholds, triggering the adjustment. Some limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger … [Read more...]