Tax Man Sneaking Up On Your Retirement Plan?
We’re hearing more and more in recent days that Obama’s grimy mitts may soon be dipping into that retirement plan you have been guarding all these years.
Recall that it was at the beginning of the last Obama go-round that an obscure perfessir at the “New School for Social Research,” Theresa Ghilarducci popped up, with the alarming notion of targeting 401(k) plans, suggesting that a government controlled substitute was really what all us poor, stupid savers/investors really need to assure some amount of retirement income. If you’re interested in more of this pap, check out her book, “When I’m Sixty-Four: The Plot against Pensions and the Plan to Save Them.”
But more to the point now, it’s a little alarming that similar notions have recently surfaced in the context of all this talk about “balanced approaches” (to seizing your property) in the name of tax reform. And indeed, nary a week to two ago, the American Society of Pension Professionals and Actuaries started a media campaign designed to educate we and thee about government’s interest in changing the hallowed tax benefits surrounding retirement plans. Check out www.savemy401k.com if you’re interested. And if you think this sounds a little remote, check with your friends and neighbors in Argentina. Quoth the Wall Street Journal on October 23, 2008:
“Argentina President Cristina Kirchner announced this week that her government intends to nationalize the country’s private pension system…Mrs. Kirchner won’t have trouble making the case for expropriation to Congress, which is controlled by her fellow Peronists. When the Argentine government ran out of money in 2001, it blamed the market and increased its own role in the economy. Since then it has imposed price controls, defaulted on its debt, seized dollar bank accounts, devalued the currency, nationalized businesses, and tried to set confiscatory tax rates with the aim of making society more “fair.”
And from our “put this in your pipe and smoke it” department, we offer a little more on the brewing mess with the alternative minimum tax, that which the acting IRS Commissioner has told Congress that unless they get off their collective duffs, and soon, the IRS effort to deal with the absence of the expected “patch” (to keep things status quo) will be the most “formidable operational risk” which the IRS has ever faced.
And just to put a face on the problem, consider that for 2011, the AMT exemption was $48,850 for single taxpayers and $74,450 for married folk filing jointly. At that level, a mere 4 million taxpayers were ensnared in the AMT web. But without a “patch” which Congress would have to approve before year end, the exemptions would revert to $33,750 for individuals and $45,000 for married taxpayers, which IRS estimates would cause 28 million more taxpayers to be subject to AMT.
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA regarding your own particular situation.
Jeff Quinn, the author of this article, is a shareholder of Ashley, Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He can be reached at 831-7288, welcomes comments at firstname.lastname@example.org, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.