"To be determined".....keep us posted, "tax proposal", HR-1 bill link

catch22

Evening,
Gonna be on the traveling side of life for a few days.
Supposedly, the tax proposal is to be released on Wednesday. Reported points for the "postcard" 1040 form are:
---may deduct mortgage interest, property tax and charitable monies
---NO, state or local income tax deductions
Don't know about the other schedule A stuff, as with healthcare expenses, etc.
Well, if ya'll discover something that might be real in the end, keep us posted please.
I do believe only 24 sessions of congress remain before year end.......they'll be busy little beavers, eh?
Regards and thank you,
Catch

Ted

@catch22: Do you mean like this ?
Regards,
Ted

davidrmoran

man, oh man

https://www.thedailybeast.com/the-five-most-outrageous-things-buried-in-the-gops-tax-bill

catch22

@davidrmoran
Thank you.

The 429 page HR-1 in its "to be determined" stage; as one may anticipate modifications, yes? I only did a quick look at this time; but the 401k, Roth IRA, HSA accounts info indexes were seen in the listings.

https://www.documentcloud.org/documents/4172067-Tax-Reform-Bill.html#document/p1

msf

@catch22, thanks for the heads up.

First, here's that same document in pdf form (I find that much easier to search; link was on the page you gave):
https://assets.documentcloud.org/documents/4172067/Tax-Reform-Bill.pdf

Since you mentioned Roth, I did a quick search and found something flying well below the radar:

SEC. 1501. REPEAL OF SPECIAL RULE PERMITTING RECHARACTERIZATION OF ROTH IRA CONTRIBUTIONS AS TRADITIONAL IRA CONTRIBUTIONS.
(a) IN GENERAL.—Section 408A(d) is amended by striking paragraph (6) and by redesignating paragraph (7) as paragraph (6).

Okay, not the clearest thing in the world, but that's the way bills are written - as "diffs" (changes) to existing law.

This is removing Section 408A(d)(6) from the tax code. I believe that's the section of code that enables recharacterizations of IRA contributions.

For example, if you contributed to a Roth, but found that you were ineligible to contribute, you could transfer the amount (plus earnings) into a traditional IRA and recharacterize the contribution as one to a trad. IRA (as if the Roth IRA had never been involved).

What is likely more important to most people here (certainly to me) is using recharacterizations to "undo" Roth conversions. You might convert three different holdings into three different Roths, planning to undo the two that performed the worst.

If this passes, no more IRA recharacterizations.

Here's a Q&A in the tax regs that illustrates that it really is 408A(d) that enables these two forms of recharacterizations. Get rid of 408A(d), and you get rid of your ability to do them.

https://www.law.cornell.edu/cfr/text/26/1.408A-5

Example 1 is the example of switching a regular Roth contribution to a trad IRA contribution (the text explicitly says this is done under 408A(d)). Example 2 is the "undo" example. While 408A(d) isn't mentioned in the example, it is mentioned in the lead-in to the examples.

bee

@msf, I came across this on Ed Slott's IRAhelp discussion board:

Beware of Sec 1501 of the House Tax bill. This is the summary from the ASPPA:

IRA Contribution/Conversion Recharacterization Rule Individuals are currently allowed to recharacterize either contributions or conversions to a traditional IRA into a Roth IRA and vice versa [IRC § 408A(d)(6)]. However, Section 1501 would repeal that provision in the tax code (raising $500 million in revenue over 10 years).

link:
https://irahelp.com/forum-post/29903-question-multi-bucket-ira-conversion-strategy

and Ed Slott Report:

The one significant change is repeal of Roth IRA recharacterizations, making Roth IRA conversions irrevocable, effective in tax years beginning after December 31, 2017. Current law enables one to convert a traditional IRA to a Roth IRA, then afterwards recharacterize it back to a traditional IRA by as late as the extended due date of the return for the year in which the conversion took place, a rare "second chance" in the current tax code. IRA owners have used this strategy most often when the value of a Roth IRA declined after a conversion, to get back tax paid on the conversion on value that is no longer in the IRA. But if this provision of the Act becomes law, this "do over" opportunity will no longer be available. Roth IRA conversions will be final.

link:
https://irahelp.com/slottreport/tax-reform-proposal-unveiled

bee

Employer Plans

The Act keeps current 401(k) contribution limits in place, the much discussed reduction of them is not proposed. The bill does include provisions that are friendly to employees by easing the rules on in-service and hardship distributions from qualified plans. An IRA-related provision here helps employees who have plan loans outstanding when they separate from service or their plan terminates. It gives them more time to roll over an outstanding loan balance to an IRA to avoid it being taxed as a distribution, extending the deadline from the normal 60-day period for a rollover until the due date for filing the tax return for that year.

same link as above...

[Deleted User]

The user and all related content has been deleted.

davidrmoran

https://www.jct.gov/publications.html?func=startdown&id=5029

and this does not include estate tax unwinding, I read

davidrmoran

and this, comical deceit:

https://www.washingtonpost.com/opinions/whats-in-it-for-johnny-lunchbucket/2017/11/03/d867a758-c08e-11e7-8444-a0d4f04b89eb_story.html

davidrmoran

ain't gonna do well in the senate, hopefully

https://www.cbpp.org/sites/default/files/styles/downsample150to92/public/atoms/files/11-5-17tax-f1.png

https://www.cbpp.org/research/federal-tax/joint-committee-on-taxation-distribution-tables-confirm-skewed-priorities-of

davidrmoran

more succinctness:

https://www.washingtonpost.com/opinions/three-almost-inexplicable-parts-of-the-republican-tax-plan/2017/11/05/09c87536-c0c9-11e7-959c-fe2b598d8c00_story.html

catch22

An add here and there, as I become aware of new articles. Any and all sources believed accurate.

---Medical expenses deduction repeal:

http://www.denverpost.com/2017/11/04/couple-with-alzheimers-gop-tax-overhaul-plan-donald-trump/

---A very basic, existing and new proposed tax code numberss.

http://www.businessinsider.com/donald-trump-tax-plan-reform-change-take-home-pay-calculator-brackets-2017-11

NO, one size likely doesn't fit all; eh? There may be other variables relative to one's tax pieces which could take to the plus or minus side of taxation.

---the "early" 529 provision, Google link below, numerous: OK, so an argument could be placed that an extra 9 months could add to the compounded return rate for a child's education account; but this reads more to setting a court case as to the "Right to Life". Yes, these non-related items find their way into all sorts of legislation, but the "early 529" circumstance is already covered, per the below in bold.

Per SavingforCollege.com; " To designate a beneficiary, you'll need their social security number, birth date and current address. If you're setting up a college fund for a child who isn't born yet, you can name yourself as the beneficiary and make the change once the child is born."

https://www.google.com/search?biw=1418&bih=635&ei=el0AWpXwEsWfjwTMnJXwDg&q=tax+reform+529+in+utero&oq=tax+reform+529+in+utero&gs_l=psy-ab.12...11213.11643.0.15213.3.3.0.0.0.0.88.211.3.3.0....0...1.1.64.psy-ab..0.1.87...33i21k1.0.vIVUoEE4v9o

Still having fun.......
Catch