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Tax Extenders and SECURE Act Bills Expected To Pass

SECURE Act Signing

Two important tax bills – the Taxpayer Certainty and Disaster Relief Act of 2019 and the Setting Every Community Up for Retirement Enhancement Act of 2019 (the SECURE Act ) – are attached to a year-end appropriations bill making its way through Congress. It is likely to be on the President’s desk by the end of this week. Both bills create significant current and long-term tax planning opportunities.

The Taxpayer Certainty and Disaster Relief Act of 2019 extends through 2020 certain code provisions that expired at the end of 2018 or are set to expire at the end of 2019. Notable items include:

  • Extension of the 7.5% deduction floor for medical expenses,
  • Deduction of qualified tuition and related expenses, and
  • Various provisions related to beer, wine, and distilled spirits excise taxes.

The Act also provides other notable changes to current tax law such as:

  • Provision for tax relief for taxpayers in qualifying Presidentially-declared disaster areas,
  • Simplification of the private foundation excise tax from 1% or 2% to a flat 1.39%, and
  • Repeal of the requirement that unrelated business taxation income of tax-exempt organizations be increased by expenses related to qualified transportation fringe benefits.

Read more in this article.

The Setting Every Community Up for Retirement Enhancement Act of 2019 (The SECURE Act) significantly alters long-established rules governing the taxation of qualified accounts. Highlights of the bill include:

  • Postponing the beginning date for required minimum distributions to age seventy-two,
  • Allowing continued Individual Retirement Account (IRA) contributions for individuals of any age with earned income, and
  • Eliminating stretch distributions from inherited IRAs by mandating the complete distribution of an inherited IRA over a ten-year time period (with few exceptions).

Read more in this article.

These sweeping changes to rules governing the taxation of qualified accounts will compel individuals to reconsider their current savings, financial, and estate planning strategies.

Ensure your tax advisor understands both the current and long-term planning opportunities created by this legislation, and stay tuned for continued updates as we follow these important bills through Congress!

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