William Byrnes' Tax, Wealth, and Risk Intelligence

William Byrnes (Texas A&M) tax & compliance articles

TaxFacts Intelligence: December 16, 2022

Posted by William Byrnes on December 16, 2022

The Texas A&M Master and LL.M. programs (e.g. international tax, transfer pricing, wealth management, or risk management) are accepting applications from financial professionals and from lawyers. Over 850 enrolled, the enrollment for a course’s section is kept to between 20 and a maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

This week, we have valuable information for parents who are sending their kids to school. An ESA can be a valuable tax-preferred tool to help with the costs–and with education costs front and center, now may be the perfect time to discuss the option. In other news, we have updates on how the Inflation Reduction Act’s premium subsidy extension could impact employer-sponsored health coverage–and a note on the retirement-related bills making their way through Congress. 

Can Your ESA Help Ease the Strain of Back-to-School Expenses? As the kids head back to school, many parents may be struggling with back-to-school expenses in today’s inflationary environment. One potential solution is an education savings account (ESA). ESAs are relatively easy to establish and don’t require an employer to sponsor the plan. Contributions are made to the account for the benefit of a child under age 18. Parents and guardians can contribute up to $2,000 per year, per beneficiary (no earned income or compensation limits apply). ESA contributions are not tax deductible, but if the funds are withdrawn to pay qualified education expenses, the earnings on the ESA funds are taken tax-free. Qualified expenses include books and supplies, college tuition and even the student’s computer and internet expenses. The costs associated with primary or secondary school also qualify, in addition to college-related expenses. For more information on the ESA rules, visit Tax Facts Online. Read More

Focus on SECURE Act 2.0: What’s in the Various Retirement Bills in Congress Today? SECURE Act 2.0 would once again raise the required beginning date, to age 73 in 2023, 74 by 2029 and to age 75 by 2032. The law would also change the rules governing catch-up contributions so that taxpayers aged 50 and older would be permitted to contribute an extra $10,000 per year if they have reached age 62, 63 or 64 (currently, qualifying taxpayers can make catch-up contributions of $6,500 per year to 401(k)s and $1,000 per year to IRAs). SIMPLE plan participants would receive an additional $5,000 catch-up option. The additional catch-up, however, would be made on an after-tax basis. One proposal would significantly increase the 401(k) contribution limits for all savers. Currently, taxpayers who are under age 50 can contribute $20,500 in pre-tax dollars to 401(k)s and $6,000 to IRAs. The proposal would increase those contribution limits by $4,000, so that IRA savers could contribute up to $10,000 per year and 401(k) plan participants could save up to $24,500 per year. For more information on the 401(k) contribution rules, visit Tax Facts Online. Read More

Will ICHRAs Start Trending Post-Inflation Reduction Act? The decreased affordability threshold and expanded ACA subsidies under the Inflation Reduction Act may put an increased financial strain on employers who must offer health coverage to employees. The individual coverage HRA strategy can present a possible solution to employers who either must offer coverage or are interested in offering health benefits to attract and retain employees. The ICHRA rules allow employers to reimburse premiums for individual health insurance coverage through ICHRAs if the several specific conditions are satisfied. First, all individuals enrolled in the ICHRA must actually enroll in individual coverage. If an individual ceases to be enrolled in individual coverage, the ICHRA must stop reimbursing their medical expenses (on a prospective basis only). Individuals who are still within the grace period with respect to paying their premiums for individual coverage are considered enrolled in individual coverage. For more information on the rules governing ICHRAs, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2022 and 2023 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier of law schools and is ranked in the top 10 for the employment of its graduating law students among U.S. law schools.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: