As we all try to keep ourselves, our loved ones and our communities safe from the coronavirus (COVID-19) pandemic, you may be wondering about some of the recent tax changes which were part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act signed into law on March 27, 2020. The CARES Act contains a variety of relief, notably the “economic impact payments,” which will be made to people under a certain income threshold.

man in a blue button down shirt holds a pen to paper to sign documents; image used for a blog post about the CARES Act affecting retirement plans and charitable donation rules

But the law also makes some changes to retirement plan rules and provides a new tax break for some people who contribute to charity.


Continue Reading How CARES Act Changes Retirement Plan and Charitable Contribution Rules

You can reduce taxes and save for retirement by contributing to a tax-advantaged retirement plan. If your employer offers a 401(k) or Roth 401(k) plan, contributing to it is a taxwise way to build a nest egg.

If you’re not already contributing the maximum allowed, consider increasing your contribution rate between now and year end. Because of tax-deferred compounding (tax-free in the case of Roth accounts), boosting contributions sooner rather than later can have a significant impact on the size of your nest egg at retirement.

pennies, dimes, nickels and quarters spilling out of a clear glass jar; used for a blog post about saving on taxes with a 401(k) plan

With a 401(k), an employee elects to have a certain amount of pay deferred and contributed by an employer on his or her behalf to the plan. The contribution limit for 2019 is $19,000. Employees age 50 or older by year end are also permitted to make additional “catch-up” contributions of $6,000, for a total limit of $25,000 in 2019.

The IRS just announced that the 401(k) contribution limit for 2020 will increase to $19,500 (plus the $6,500 catch-up contribution).


Continue Reading Save on Taxes with Your 401(k) Plan

Will you be age 50 or older on December 31? Are you still working? Are you already contributing to your 401(k) plan or Savings Incentive Match Plan for Employees (SIMPLE) up to the regular annual limit? Then you may want to make “catch-up” contributions by the end of the year. Increasing your retirement plan contributions