Republicans also want to make permanent deductions for pass-through business income. Extending the individual and business cuts would cost $627 billion over 10 years, according to a score by the Joint Committee on Taxation. (Photo: Shutterstock)
Republicans on the U.S. House of Representatives Ways and Means Committee are prepping to mark up a Tax Reform 2.0 bill that reportedly will include several retirement and savings provisions.
Lawmakers are considering the following:
- Removing the age cap on IRA contributions, which is now 70.5.
- Making distributions from tax-deferred retirement accounts be penalty-free to cover the costs of childbirth or adoption.
- Expanding 529 accounts to cover more schooling options and to allow the use of assets to pay down student loan debt.
The tax-writing committee is also considering establishing Universal Savings Accounts (USAs), which would allow after-tax savings to be invested and grow tax-free. Distributions from USAs could be taken at any time, for any expense.
Rep. Kevin Brady, R-TX, chair of the committee, has said the retirement and savings provisions will be separate from the larger thrust of Tax Reform 2.0, which is to make permanent the cuts to the individual tax rates made in last year's tax package. Those cuts are scheduled to sunset in 2025.
Republicans also want to make permanent deductions for pass-through business income. Extending the individual and business cuts would cost $627 billion over 10 years, according to a score by the Joint Committee on Taxation, which was requested by House Democrats.
That estimate does not account for the cost of the new retirement and savings reforms.
Several Republicans have stated they intend to bring the bills to the House floor by the end of the month.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
