Additionally, the bill would ban additional contributions to a Roth or traditional IRA for a tax year if the total value of an individual’s IRA and defined contribution retirement accounts exceeds $ 10 million. . The contribution limit would apply to single taxpayers with taxable income greater than $ 400,000, married taxpayers filing jointly with taxable income greater than $ 450,000 and heads of households with taxable income greater than $ 425,000. .
Additionally, if an individual’s combined Traditional IRA, Roth IRA, and Defined Contribution Retirement Account balance exceeds $ 10 million at the end of a taxable year, a minimum distribution would be required for the next year. The minimum payout is typically 50% of the amount by which the previous year’s Traditional IRA, Roth IRA, and Defined Contribution total balance exceeds the $ 10 million limit, with some caveats, according to a summary of the invoice issued by the House Rules Committee.
Bradford P. Campbell, Washington-based partner of Faegre Drinker Biddle & Reath LLP and former Assistant Secretary of Labor for the Employee Benefits Security Administration during President George W. Bush’s administration, was not surprised that the provisions of the IRA were reinstated in the bill. because they increase incomes and are in keeping with the Democrats’ message that the rich pay more taxes.
However, the IRA provisions will hardly have the impact that the automatic pension plan proposal would have, according to Mr. Campbell, who said: “It is unfortunate that they have kept the part that will have the less effect and dropped the part that is going to have the most effect. “