IRA Contributions & Potential Tax Credit

A new provision in President Barack Obama's 2010 budget proposal would allow employees to make IRA contributions via payroll deductions through their employers. The item was discussed recently by a U.S. Treasury Department official during a roundtable discussion in New Hampshire with the Small Business Administration's Office of Advocacy. The discussion was cited in a recent Small Business Advocate newsletter (PDF link).

This proposal, according to the treasury official, is intended to expand retirement savings to those who currently do not have employer-sponsored retirement plans available. The proposal is also intended to be simple and inexpensive for employers to implement. Employers with 10 employees or fewer would be exempted from the automatic IRA proposal. The proposal would also make available a tax credit for employers that offer employees automatic IRAs.

IRS Retirement Planner

The IRS recently unveiled a retirement plan website, offering information and analysis tools. The site is designed for small businesses and the self-employed, people more likely to have control over their retirement plan options.

Reviewing this type of information as you compile your year-end tax documents is a good practice. Asking your accountant questions during the preparation of your return can ensure you achieve retirement goals by keeping your tax strategy in line with your plans.