There's the version of tax resolution the late-night commercials sell you. Then there's how it actually works. I'm Darrin Mish, a Tampa tax attorney. I've spent 32 years on the inside of these cases. Here's the real version.
Critics of the government’s new healthcare reforms, H.R. 3200 or The Affordable Health Choices Act have named it Obamacare. While many are wary of its intrusive means of obtaining taxpayers’ personal details, there is another initiative on the cards from the President. This one is about savings for retirement.
In a bid to boost Americans’ retirement savings, President Obama will launch a few initiatives. These initiatives came as a result of the fact that half of American workers do not have a retirement plan at their workplace. At the same time, loan debts and credit card debts had risen. These administrative actions do not require new legislation from Congress and are aimed at making it easier and more automatic for Americans to save for their retirement.
It was noted that most people are more likely to contribute to a retirement savings plan if they were included automatically into such plans. If it was required of them to sign up, many would put it off and never get around to doing it. Most large and medium-sized companies have their own automatic retirement plans in which employees are enrolled by default unless the employee personally requests to be excluded. On the other hand, most smaller firms adopt a simpler plan called the Individual Retirement Account (IRA).
Hence, the first initiative is to have the Labor Department publish guidelines to enable small firms to set up automatic enrollment for their IRAs. These guidelines would also show how to implement a system that increases savings rate annually or with every pay rise.
The second initiative would be to allow the IRS to give tax refunds in the form of US savings bonds. Taxpayers would be given the option of receiving their refunds in this new form or continue receiving it in the usual form of a check. It is estimated that the IRS makes about 100 million tax refunds each year and the average amount of refund is about $2,000.
The third initiative will see employees be given the option of getting their vacation time and overtime pay in the form of contributions to their retirement accounts. This is in place of being paid in cash or check as part of their salaries.
The President said that the IRS and the Treasury Department are in the process of issuing guidelines for all taxpayers to help everyone understand the rules that govern retirement plans when people change jobs.
These initiatives will come into effect immediately.
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