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  • by PCS
  • 11/30/2017
  • PCS, Compliance

Tax Reform Update: 401(k) Appears to be Saved

On November 2nd, House Ways and Means Committee Chairman Kevin Brady (R-TX) introduced the Tax Cuts and Jobs Act, which is legislation to overhaul America’s tax code for the first time in 31 years. 

Here are a few of the highlights of the Tax Cuts and Jobs Act for individuals and families:

  • Popular retirement savings options such as 401(k)s and Individual Retirement Accounts will be preserved so Americans can continue to save for their retirements.  
  • Individual tax rates for low and middle-income Americans would be lowered to 0%, 12%, 25%, and 35% while the tax rate for high-income individuals and families continues to be 39.6%
  • Significantly increases the standard deduction from $6,350 to $12,000 for individuals and $12,700 to $24,000 for married couples.

The 401(k) deduction has been a part of the discussions involving tax reform for months as a way to help pay for the tax cut. This legislation preserves the 401(k) and other employer-sponsored retirement plans as a means of retirement savings.