Hopefully you had the opportunity to submit your taxes and are in the group of folks who are eagerly awaiting (or have received) a refund! Preparing your taxes can be tricky, and whether you utilize a professional to file or you go it alone, understanding the tax code can be intimidating at times.
What could make this process even more confusing is the fact that Congress has been discussing the concept of overall tax reform, and it could affect YOU! Specifically, Congress could change the tax treatment of your retirement account(s). If this sounds familiar, you may remember our blog post from March.
If you’ve been in the workforce for any amount of time, you may have some experience with a defined benefit (pension) and/or a defined contribution [401(k) or 403(b)] plan. Under current tax law, contributions to your 401(k) are made before payroll taxes are taken out. So, it’s tax free until you retire, when you’ll pay tax on the amount that you withdraw.
So–what’s the concern? There have been discussions recently on proposals that attempt to change the system. This could affect how you are taxed, when you are taxed, the amount you’re able to contribute and the type of account you’re allowed to contribute to.
SHRM is concerned about the possibility of these changes, and our Government Affairs team is hard at work ensuring that Congress knows exactly how these changes could impact how employers administer their retirement plans. SHRM, which chairs the Coalition to Protect Retirement, has been working with our members for the past few years to advocate on this important issue. If you’d like to get involved, please feel free to click HERE to write a letter to your member of Congress. And be sure to catch the HR Issues Update Newsletter, which keeps you up-to-date on all HR public policy-related info!