PITTSBURGH, Nov. 28, 2016 /PRNewswire-iReach/ -- Visit www.paytaxeslater.com/mediakit for contact details, review copies, photos, and an author bio.
On September 21, 2016, in a decision that will soon impact the pocketbooks of millions of Americans, the Senate Committee on Finance voted 26-0 to kill the "stretch IRA."
"For years, the stretch IRA has been the greatest opportunity taxpayers had to effectively pass on their IRA and retirement plans to their heirs and keep it out of Uncle Sam's hands for many years," says Certified Public Accountant and Attorney and best-selling author James Lange.
The "stretch IRA" currently allows your non-spousal beneficiaries to stretch distributions of the entire IRA they inherit from you over their lifetime. That way, depending on how old they are, they pay the income taxes on relatively modest annual distributions for many years while continuing to benefit from tax-deferred growth.
But the inevitable change in the law will require beneficiaries to pay income taxes on the value of the IRA they inherit within 5 years of the IRA owner's death. With a 26-0 vote in the Senate Finance Committee, it is virtually a certainty this will become law in 2016 or 2017. It is effective for IRA owners dying on January 1, 2017 or later.
One saving grace is that there are two exceptions. The first is that this law will not apply to IRAs or retirement plans that you leave to your spouse. The second is there will be a $450,000 per IRA owner exemption that will allow the existing "stretch IRA" law to apply.
"The tax payments under the new law could be financially devastating to your beneficiaries as the larger distributions could be taxed at the highest tax rates — currently 39.6%," Mr. Lange notes. "Under current law, the smaller stretch IRA distributions are usually taxed over a much longer period of time and usually are taxed at a significantly lower rate."
In his latest book, The Ultimate Retirement and Estate Plan for Your Million Dollar IRA Including How to Protect Your Nest Egg from the "Death of the Stretch IRA" Legislation, Mr. Lange offers multiple strategies that you should employ NOW to minimize the brutal tax your children will suffer if you do nothing.
"After the election there will be many initiatives to change our tax
laws concerning retirement accounts. If you have a substantial IRA—
YOU MUST READ THIS BOOK. The information contained could be
life changing for you and your beneficiaries."
Burton G. Malkiel, author of A Random Walk Down Wall Street
One solution is a series of Roth IRA conversions. Another solution is a series of gifts. A third is to spend some of your money on experiences with family and friends now instead of dying and having Uncle Sam take a third of it away in taxes. The best solution for many IRA owners might be a combination of all of the above.
Mr. Lange was one of the few tax experts to correctly predict the death of the stretch IRA which he did in two articles published in the January and February 2016 issue of the prestigious peer-reviewed tax journal Trusts Estates. His new book, The Ultimate Retirement and Estate Plan for Your Million Dollar IRA is being released today in paperback and e-book. You can download a free copy online now at www.paytaxeslater.com/freeirabook.
Note: The above is provided for informational purposes only and is not a recommendation. Investments and strategies discussed may not be suitable for all investors. All investing involves risks, including the potential for loss of principal. There is no guarantee that any strategy will be successful. Learn more at www.paytaxeslater.com
Please contact: James Lange * 412-521-2732 * firstname.lastname@example.org * 2200 Murray Avenue, Pittsburgh
Media Contact: Amanda Cassady-Schweinsberg, Lange Accounting Group, LLC, 412-521-2732, email@example.com
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SOURCE James Lange