KTADDITION
THE Winter 2023 Volume 29 Issue 1
CONTENTS SECURE 2.0
Page 1-2
Important Things To Know About Use Tax
Page 2-3
Homing in on Home Energy Credits
Page 4-5
Paying Taxes the Electronic Way
Page 6
What Do We Need to Prepare Your Personal Tax Return?
Page 7-8
Workplace Wellness
Page 9
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A Publication of Ketel Thorstenson, LLP
SECURE 2.0 Josh Newman, CPA, Manager, Tax Department
In December, a government spending bill was signed into law with several significant retirement provisions. Here are some of the significant tax and retirementrelated provisions included in the SECURE 2.0 Act of 2022. Expanded Automatic Enrollment in Retirement Plans
For retirement plans set up after the enactment date of SECURE 2.0, employers must provide for automatic contributions of at least 3% and not more than 10% during an employee’s first year of participation, unless the employee chooses otherwise.
Effective on the first day of each plan year after a completed year of participation, the contribution percentage must automatically increase by 1 percentage point to at least 10% but not more than 15%. This provision is effective for plan years beginning after December 31, 2024. Increase in Age for Required Minimum Distributions (RMDs)
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Retirement plans subject to RMDs just got a bump up in the age requirement. Under current law, the age to start RMDs is 72. That will change to age 73 for those that turn 72 after 12/31/2022 and to age 75 for those that turn 74 after 12/31/2032.
Josh Newman, CPA, Manager, Tax Dept.
Higher Catch-up Limit
Starting in 2025, individuals reaching the age of 60 will be allowed $10,000 of catch-up retirement contributions. However, for individuals with income greater than $145,000 these added contributions will be subject to mandatory Roth treatment. Penalty Free Withdrawals for Certain Emergency Expenses
SECURE 2.0 provides an added exception to the 10% penalty tax for early distributions from retirement accounts. There is now an exception for certain distributions used for emergency expenses, such as unforeseeable or immediate financial needs relating to personal or family emergency expenses. These emergency expenses are capped at $1,000. New Retirement Plan Designs
Two new retirement plan designs were created by SECURE 2.0 and will become available in 2024. (Secure 2.0 continued on page 2)