You may have heard there are afew budget plans meandering around the capitol, one of which is President Obamaâ€™sproposed budget. We donâ€™t have many details as of yet, but self-employedprofessionals should take note â€“ they could be tax targets when it comes totheir retirement savings.
For retirement savers and thosemaking powerful use of an IRA, hereâ€™s at least one tidbit the rumor mill hasbeen circulating well before the budgetâ€™s release. If enacted, â€œwealthyâ€individuals would be pinched with a $3 million cap on their IRA holdings.
Several sources have reported onthis, to include Time Magazine in anarticle titled â€œObamaâ€™s Budget Would Cap Tax-AdvantagedSavings.â€ Although $3 million may sound like a lot, it may end upaffecting more savers who otherwise might not be considered traditional taxtargets: self-employed individuals like doctors, lawyers, and entrepreneurs.The self-employed all have unique abilities (and needs) to contribute largeamounts to their IRAs.
So, who is the intended targetof this kind of a cap? One name keeps surfacing: Mitt Romney. Remember thatfabled $100+ million IRA, as pointed out by the Boston Globe in an article titled â€œObama budget would pinch IRAs of wealthywith $3m cap.â€
The analyses of the proposal are still being churnedout, and there are some important details to be hammered out as well. Atpresent, this cap is no more than a proposal and part of a budget plannone-too-well-liked by either side. Nevertheless, this kind of cap and itsprying look at tax-advantaged plans is worth watching.
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