CPA in Houston Provides Insight about Secure 2.0 Act
Evans Sternau CPA is a CPA in Houston and provides tax planning and tax advisory services to help you navigate the the Secure 2.0 Act.
What does the Secure 2.0 Act mean for SMB’s?
The Consolidated Appropriations Act 2023 that was signed into law on December 29, 2022, by President Biden includes the Secure 2.0 Act.
This article is written by a CPA in Houston and lays out the things you need to know as a business owner.
Employees will be automatically enrolled in 401(k)
All new 401(k) and 403(b) plans will be required to automatically enroll eligible employees in the plan. This will be effective for plans established after December 29, 2022, and will be required to begin January 1, 2025. There are exemptions for employers with less than 10 employees and new businesses that have been in existence for less than 3 years.
Tax Credit Available for Employers Starting a Retirement Plan
Employers with less than 50 employees will be eligible to receive a tax credit equal to 100% of the retirement plan start up costs incurred, up to $5,000.
In addition, employers will be eligible for a tax credit of up to $1,000 per employee for employer contributions to the retirement plan.
Increased Age for Required Minimum Distributions (RMDs)
The Secure 2.0 Act increases the age at which individuals must begin taking required minimum distributions (RMDs).
If you turned 72 after December 31, 2022 and 73 before January 1, 2033, your RMD age is 73.
If you turn 74 after December 31, 2032, your RMD age is 75.
Tax Free Rollovers from 529 plans to Roth IRAs
The Secure 2.0 Act enables beneficiaries of 529 plans to rollover their balance to a Roth IRA without tax or penalties. The account must have been in existence for more than 15 years and the maximum lifetime rollover from 529 to Roth IRA must not exceed $35,000.
About The Author
Christopher Sternau, CFP®, CPA
Partner – Evans Sternau CPA LLC
Christopher Sternau is a Certified Public Accountant and Certified Financial Planner with over a decade of experience providing comprehensive tax and financial planning services to several of the wealthiest families in the United States. He focuses his practice on complex individual and closely held business tax planning and preparation. His clients have business interests in a wide range of industries including oil and gas, mining, real estate, cattle ranching, retail, technology and many others.
Chris is the founding member of Evans Sternau CPA LLC. Prior to founding Evans Sternau CPA LLC, Chris led the tax department for a family office in Houston, Texas. He also spent several years as a Tax Manager at Andersen.
About Evans Sternau CPA LLC
Evans Sternau CPA is seeking reform in an industry where responsiveness and availability are the exceptions – not the norm.
Our global network of committed CPAs and accountants places proactive thinking at the forefront of our work. With robust service offerings and client support strategies, we are always searching for opportunities to serve your best interests.
While our philosophy is rooted in tried and trusted methods, our execution surpasses the norm and redefines the standard.
Evans Sternau CPA provides proactive tax, accounting, and advisory services for business owners, entrepreneurs and individuals with complex tax challenges. Evans Sternau CPA is for those that want year round support, not just during tax season.