Planning and Tax Updates for 2024
We hope 2024 is off to a fantastic start for you! As we navigate through this New Year, we're committed to keeping you informed about important updates that may impact your financial planning decisions. One of the most crucial aspects of financial planning is staying updated on tax regulations. In 2024, there are several notable changes to be aware of:
Inflation adjusted tax brackets and contribution limits
With inflation numbers continuing to remain higher than the Federal Reserve’s target goal of 2%, the government has done a sufficient job of increasing the income amounts for each tax bracket, as well as the contribution limits for retirement accounts. In the guide you can visit here: https://www.schwab.com/resource/tax-reference-guide-2024, you can see the 2024 tax reference guide put out by our partner Charles Schwab. We highly recommend reviewing that, to see which numbers are pertinent to your situation this year.
SECURE 2.0 Act
While this was passed in 2022, there are many provisions in the act that are set to take effect this year. These are just a few of the more widely relevant changes:
Leftover funds in 529 education accounts can be rolled over tax-free to a Roth IRA. There is a $ 35,000-lifetime cap. Yearly rollover amounts can’t exceed the annual pay-in limit for Roth IRAs, which is $7,000 for 2024. And the 529 account must have been open for more than 15 years.
Roth 401(k) owners no longer need to take required minimum distributions. This conforms to the rule that applies to owners of Roth IRAs.
Student loan relief can be offered through workplace retirement plans. This allows employer 401(k) matches based on student loan repayments made by employees.
The qualified charitable distribution cap is indexed for inflation so that IRA owners 70½ and older can transfer up to $105,000 in 2024 from their IRAs directly to charity without having to pay tax on the withdrawal.
Individuals under 59 1⁄2 can make one withdrawal from your 401(k) or traditional IRA of $1,000 per year to cover personal and family emergency expenses without owing the 10% penalty. Victims of domestic abuse can withdraw up to $10,000 from IRAs and 401(k)s without owing the penalty.
As with most things in life, the only thing constant with tax regulations is change. We’re here to help you navigate those changes, as tax efficiency, both now and in the future, can significantly bolster your bottom line. We're dedicated to providing you with the highest level of service and support. If you have any questions or if there's anything we can assist you with, please don't hesitate to contact us.
Investment advice is offered through Belpointe Asset Management, LLC. 500 Damonte Ranch Parkway, Building 700, Unit 700, Reno, NV 89521