Democrats in Congress are pushing for more ways to raise taxes for wealthy Americans, and their new mechanism fills a loophole on Roth IRA contributions. Currently, people earning over $ 400,000 can convert pre-tax retirement savings accounts into a Roth IRA. Technically, individuals cannot contribute to their Roth if their income exceeds $ 140,000, but the âbackdoorâ loophole has allowed you to convert pre-tax contributions into a Roth IRA. What’s more, House Democrats are trying to end Roth’s “mega backdoor” that was saving up to $ 38,500 for wealthy people. The Democratic proposal also requires a minimum declaration for certain Roth balances and other restrictions. These are significant changes to the potential tax code for the wealthy, and if implemented, these provisions would all come into effect on December 31, 2021.
FINAL SUM: Democrats are also considering automatic enrollment in Roth retirement vehicles to increase retirement savings on the lower income spectrum. These are some of the most significant changes to the tax code in recent years, all with the goal of increasing the tax base and paying a bill of $ 3.5.
- I’m going
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.