- The GOP is pushing for greater tax breaks for the middle class to boost retirement, education and other savings.
- Tax Reform 2.0 would come with a $627 billion price tag.
- The tax plan is still being drafted, but the GOP is pushing for lawmakers to vote later this month.
On Thursday, Sept. 6, the House Ways and Means Committee presented Tax Reform 2.0, an expansion on the Tax Cuts and Jobs Act and potentially the government’s way of recognizing that Americans aren’t always great savers.
Providing more savings opportunities on life’s expenses, President Donald Trump told Fox Business that the new tax cuts in this plan are “aimed at the middle class.” The proposed tax legislation, which will likely go to vote this month at the behest of the GOP, comes with a $627 billion price tag over the next decade, according to a Joint Committee on Taxation analysis.
Click to read more about how Trump’s tax plan could save businesses 20 percent.
Still a work in progress, according to CNBC, the plan introduces more ways to save money with the following proposals:
- Permanent Tax Cut for Individuals: Scheduled to expire in seven years, the proposed bill aims to permanently extend tax cuts for individuals.
- Eliminating IRA Contribution Age Limits: Currently, IRAs are used to save for retirement for Americans ages 70 ½ and younger. The new plan aims to eliminate the age restrictions to promote savings, as reported by CNBC.
- New Baby Savings: When families expand — whether by birth or adoption — and budgets run thin, the proposed plan would allow families to dip into retirement accounts penalty-free.
- Creation of New Universal Savings Accounts: This would allow American families to save tax-advantaged money for just about all of life’s occurrences with a “fully flexible savings tool,” as outlined in Tax Reform 2.0.
- Expansion of 529 Education Accounts: A 529 savings plan is sponsored by a state or agency and earmarks funds for all things education related — books and tuition at colleges, universities, vocational schools and eligible private primary and secondary institutions. The proposed legislation includes applying 529 funds to cover the cost of home schooling, fees related to a trade apprenticeship and to help pay off student debt.
With about half of Americans on track to retire with less than $10,000 in savings, according to a GOBankingRates study, Tax Reform 2.0 would offer tangible savings interventions for Americans.
Click through to read more about tax loopholes that could save you thousands.
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