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🚨SECURE Act FINAL Regs are here!🚨

I honestly can't remember a time when advisors, tax pros and "mom and pop" investors more eagerly awaited news from the IRS.

But more than 4 1/2 years after SECURE was passed, we now have some definitive answers to key Qs.

A thread... 2/x

As usual, I'll be live tweeting my thoughts/commentary in this thread as I go through the Regs.

So tweets will ebb and flow.

You'll know when I'm "done," I promise! Until then, if there's a break in the tweeting, I'm reading, taking care of my day job, or parenting😜

1/ mega💩ton

Ladies + gents, please fasten your seatbelts, b/c it’s time to take a Simpsons-themed deep-dive into SECURE Act 2.0.

The retirement bill is on the cusp of becoming law as part of a broader 4,000+ page Omnibus bill.

Full text @ pg 2046 (buff.ly/3hJJtCk) 2/

Now, before we get any further, we need to address the 🐘in the room...

Yes, I've used the Simpsons theme before, but...

I tried (really, I did) to look for other options but there's SO MUCH in the bill that the Simpsons was the only option w/ enough easily available GIFs!

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Short🧵

🚨Important Update🚨

We have a definitive answer to one of the most frequently asked questions of 2022...

“Do people who inherited an IRA in 2020 or 2021, and who are subject to the Secure Act’s new 10-Year Rule, have to take an RMD this year?”

Short answer: NO!🤑 2/

We know this thanks to IRS Notice 2022-53.

At a high level, Notice 2022-53 says "beneficiaries subject to the 10-Year Rule don't have to worry about taking any RMDs from the inherited accounts in 2021 or 2022."

Full text of Notice: irs.gov/pub/irs-drop/n…

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On the income tax side of things, all the forgiven debt will be tax-free at the Federal level.

Things are dramatically more complex at the state level.

In some states, it's already tax-free (state has no tax, conforms to Fed rules or has its own exception), some states... 14/

...which don't currently have an exception will create one, and in still other states, the discharged debt is going to be taxable. Oof!

@mkant has a good article on this, but I would anticipate more changes before year-end. thecollegeinvestor.com/36107/state-ta…

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OK... Buckle up, b/c it's time to break down the Biden Administration's big announcement from today on student loans.

Let's get some housekeeping out of the way:

White House Fact Sheet: whitehouse.gov/briefing-room/…

DOE announcement: ed.gov/news/press-rel…

Onwards!!! 2/

For many, the headline news from today is the potential forgiveness of a substantial amount of student debt.

In general, maximum debt forgiveness is limited to $10,000 per borrower.

If, however, a borrower also received a Pell Grant, max forgiveness is ⬆ to $20,000

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Buckle up b/c it's time to take a look the Inflation Reduction Act.

Meow I'll say from the start, this won't be a long trip. There's just VERY little in the bill from a planning perspective.

If you're inclined to read the legislative text yourself: democrats.senate.gov/imo/media/doc/… 2/

In fact, after a pretty solid first pass, there is there is SO little in this bill to talk about, I almost decided not to make this thread.

But, alas...

🚨Thread Time🚨

1/💩-ton

Please "secure" your seatbelts, b/c it's time to break down the brand-spanking-new IRS Regs on the SECURE Act.

If you're inclined to dive through the 275 pages yourself, here's the link: public-inspection.federalregister.gov/2022-02522.pdf

Spoiler alert: There are surprises! 2/

Let's start with a quick reminder of arguably the SECURE Act's most impactful change...

It created the 10-Year Rule, which applies to most non-spouse beneficiaries.

Under that rule, the entire balance of an inherited acct must be emptied by the 10th year after death...

🚨Thread Time🚨

1/💩-ton (but far fewer than I'd have guessed a few weeks ago)

Buckle up, b/c it's time to break down the Build Back Better Act

A year in the making but seems we now have what's likely the final bill text of this infrastructure/tax bill: rules.house.gov/sites/democrat… 2/

Now, normally we start by covering some of the most important parts of a bill, but this time, we really need to start with what NOT in the bill.

Given where this started, it's a shockingly, and (depending on your point of view), either impressively or depressingly long list.

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Sounds good, right? But there's a catch... This change is FANTASTIC for the uber-wealthy.

For the 'merely' affluent taxpayer though? Not so much😕

Specifically, whereas Biden's proposed top rate didn't kick in until AGI exceeded $1 million, the bill would "re-align"... 12/

..the capital gains brackets with the ordinary income tax brackets (make them start at the same $ amounts).

Great for remembering where brackets begin, but...

...it means the top cap gains bracket would start at 'just' $400k for single filers and $450k for joint filers...

1/💩-ton

(perhaps so many that I should use 2💩emojis😬)

OK, time to get this show on the road!

We now have a draft version of Subtitle I of Dems proposed legislation. And WOW is there a lot to discuss.

You might want to buckle up, b/c this is going to be a bumpy ride... 2/

...The final version of this bill isn't likely to come anywhere near the length of some more recent pieces of legislation, but Subtitle I (pictured below), which has the bulk of the tax changes most planners will be concerned with, still clocks in at over 225 pages...

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OK, here's the deal... upon a quick first glance (as in 'reading 645 pages in 15 minutes quick), this does not appear to be "The Big One."

It's a lot of tax stuff, but nothing on step-up changes, cap gains rate changes, a new top ordinary rate, etc.

waysandmeans.house.gov/sites/democrat… 2/

That is likely to follow here, in the near future (as soon as Democrats can come to an agreement, themselves, as to what it should say).

The significant items in here for planners appear to be primarily in "Subtitle H-Social Safety Net"

Included there are...

1/💩ton

Ok... kids are asleep, I've finished reading the bill, so buckle up!

It's "Go time!"

We're gonna break down HR 2954, better known as "Securing a Strong Retirement Act of 2021."

( And even better known as SECURE Act 2.0!)

Here's the bill text:
waysandmeans.house.gov/sites/democrat… 2/

As always, I want to start with some high-level thoughts...

This one clocked in at 146 pages. While that pales in comparison to recent legislative endeavors (cough, cough... looking at you CAA

https://twitter.com/CPAPlanner/status/1341111472269746180?s=20

) its worth a reminder that this is 100% retirement stuff!

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OK, the House passed the American Recovery Plan LATE Friday evening, so let's do this thing...

For starters, here's the bill text: docs.house.gov/billsthisweek/…

At 'just' 592 pages, it's a relatively brisk read compared to the 6k-page Consolidated Appropriations Act December... 2/

...The most important thing to know at this point is this is NOT law yet. And for that matter, there's about a 0% chance this EXACT bill becomes law.

Dems seem resigned to passing this round of stimulus relief w/out bipartisan support (that many had hoped for)...

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Alright, I've got ahold of the 19-page "Fact Sheet" for the Biden "American Rescue Plan." (Thanks @TaxNotes!)

This is prob the best we're going to get for now, so I'm gonna use this to break down some of the proposals of the Plan relevant to tax and financial planning... 2/

The American Rescue Plan would provide additional stimulus checks of $1,400 per eligible person. Together w/ the $600 amounts that were/are being paid via the Appropriations Act in December, it brings the total value of recent payments to $2k/ eligible person.

Notably...

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Joe Manchin has come out strongly against $2,000 stimulus checks.💸💸💸

A quick thread on what this means ...

With the wins by Warnock and Ossoff earlier this week, and combined with independents who caucus with them, Dems will control 50 of the 100 seats.

And... 2/

in the event of a tie, the VP (who's also the President of the Senate) casts the deciding vote, effectively giving Dems control of the Senate.

Notably, though, Manchin IS a Democrat.

Thus, if Ds lose Manchin and Rs hold party line, they can't pass a bill increasing the...

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In light of GA's election results, and what's likely a flipping of the Senate, a quick thread recapping some key provisions of the Biden Tax Plan...

(No GIFs. Proposals don't get those)

On the income tax side, the Biden tax plan sets a clear, bright-line mark at $400k... 2/

If you're below that, you'd be pretty 'safe' from seeing your tax rate(s) increase under his plan.

For those w/ income of $400k or more, he proposed returning the top rate to 39.6% (though whether this is for single filers, joint filers, or both, was never made clear)...

1/💩ton

OK we have text of the new Stimulus bill... combined w/ a WHOLE lot of other legislation.

In all the PDF version of the full bill clocks in at 5593 pages. Can be found: docs.house.gov/floor/404-main…

Buckle up. This is gonna be a LONG ride! 2/x

But before we dive into the bill, a quick note from my soap box… This whole process is absurd. They JUST released a 5k+ page bill, and they are going to vote on it TODAY.

They aren't even pretending to have time to read what they're voting on anymore.

*Steps off soap box*

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Lots to digest in the R's latest stimulus proposal. Here are just a few of the more interesting tidbits w/ respect to the #PPP program (including a proposed PPP2):

(Note: Just a PROPOSAL at this point. Rs + Ds still need agreement before anything will get passed.

1) More... 2/

expenses will be eligible uses for PPP proceeds (and eligible for forgiveness), including PPE and other expenses incurred to comply w/ COVID safety guidelines.

2) Borrower could choose covered period of their choice between 8 weeks and 12/31/20. I see this primarily as a...

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🚨BREAKING: HUGE NEWS FROM IRS ON RMDS!🚨

__________
TL/DR version: ALL unwanted 'RMDs' eliminated by the CARES Act taken in 2020 can now be returned up through August 31st.

Here's the text via IRS Notice 2020-51👇

And now for some more detail...
lnks.gd/l/eyJhbGciOiJI… 2/

Notice 2020-51 solves ALL the problems that people may have run into when trying to roll back unwanted 2020 'RMDs'.

First of all, the 60-Day window rollover window is extended to the later of 60-days after a distribution was received, or August 31st.✅

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THREAD TIME!

🚨Breaking News🚨

The #IRS has just released Notice 2020-50 which provides new guidance for Coronavirus-Related Distributions and CARES Act-created Enhanced Plan Loans.

Will be tweeting while reading...

Full document: lnks.gd/l/eyJhbGciOiJI… 2/

Quick note that both items addressed in this Notice related to relief provided to retirement savers under Section 2202 of the CARES Act (Full text: govtrack.us/congress/bills…)

OK, now let's get to the Notice. I quickly glanced and see it answers at least SEVERAL open Qs...

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Alrighty then... Kids are asleep, and dinner is done. So time to breakdown Congress's latest 'gift' to small business owners, and the tax and financial planning community.

It's called the Paycheck Protection Program Flexibility Act (Full Text: congress.gov/bill/116th-con…)... 2/

Now unless you've been sleeping under a rock for the past 68 days (yes, that's the exact number of days it's been since the CARES Act was passed... though it feels more like 84 years to many of us), you've heard about the #PPP program and probably know the basics. But...