Tax Tips

Late December brought the passage of the Secure Act 2.0 (December 29, 2022). The bill is loaded with various provisions, mainly focused on retirement plan related changes. The bill brought increases in tax credits for small businesses related to retirement plan start-up costs. The required minimum distribution (RMD) age was raised from 72 to age 74 for individuals who turn 74 years of age by 2032. There was an increase in allowable retirement plan catch up contributions. Also related to catch up contributions, there are now income limitations ($145,000) on catch up contributions being tax deductible. Taxpayers with income over that limit would have their catch-up contributions subject to Roth tax treatment.

We find one of the more interesting provisions was related to unused 529 plan funds. Taxpayers may now convert unused 529 plan dollars to Roth IRA accounts (rollover maximum of $35,000 over their lifetime) if 529 funds were not used to pay for education. There are some requirements that must be met to qualify for the rollover such as the 529 account must have been open for 15 years and that the 529 to Roth IRA rollovers are subject to annual Roth contribution limits. However, such conversion would relieve taxpayers from a possible 10% withdrawal penalty.

Among other things added were additional relief from penalties for retirement account mistakes, additional exceptions to penalties for certain qualifying retirement plan withdrawals, and a whole new set of rules permitting access to retirement funds during times of need. A few notable events providing relief from penalties include natural disasters, terminal illness, and a more open ended “emergency withdrawal for unforeseeable or immediate financial needs” up to $1,000 per year. Additional restrictions apply to qualify for penalty relief. Note that although penalties may not apply to certain retirement plan withdrawals, they are still taxable and it’s important to plan for payment of income tax on any distributions.

BY REGENCE

Revered football coach Mike Leach died recently following complications from a heart condition, the Seattle Times reported. The passing of the 61-year-old coach, who led the Washington State University Cougars to achieve bowl eligibility six times, is a good reminder of the importance of maintaining your heart health.

Heart disease is the leading cause of death for both men and women from most racial and ethnic groups in the United States, according to the Centers for Disease Control and Prevention (CDC). One person dies every 34 seconds in the U.S. from heart disease, the CDC says. Having regular check-ups with your doctor and receiving recommended preventive care can help reduce your risk of developing heart disease.

Most Regence health plans cover preventive care with no out-of-pocket costs when you see an in-network provider. That includes an annual wellness visit with your primary care provider, who can make sure your heart is in good condition and recommend things you can do to improve your heart health.

Cardiovascular behavioral therapy and screenings are also covered every year, and screening tests for cholesterol, lipid and triglyceride levels are covered once every five years. Most plans also cover nutrition counseling to help you establish a heart-healthy diet. Check your insurance plan today to see what’s covered for you and to learn more.