Syndicate
401K Plan
For many individual investors, the 401 (k) plans constitute the only way out to lighten the income from tax burden. There are many businessmen that create these plans with the purpose of promoting the savings among their employees and also with the intention of giving them an extra benefit out of the salary under the form of tax protection.
In the case of the classic plan, the employee consents to have deducted from its salary a determined amount of money; the businessman, by his part, equals this sum or contributes according to a movable scale. In this way, the employee can reduce its gross corrected income in a sum equal to the to the contribution done to the 401 (k) plan. The employee is permitted to ask loans with the guarantee of its contributions to the plan.
The new tax law permits the 401(k) plans to continue performing its missions as instruments of tax protection. For this motive, the plans have become to the eyes of the employee in an important advantage.
The contribution and the maximum tax deductions are determined by the inflation and they increase in accordance with it, if well they are limited to 15% of the income of the employee before taxes.
If you have to take a decision about the IRA’s or about the 401(k) plans, consult with your tax advisor before taking any action.
Each situation is different and the laws change constantly.
Capital Gains
Recent changes in the taxing law have reduced once more the maximum imposition over capital gains at long term, leaving them in a 20%. This law considers capitals at long term those that are possessed for more than 12 months.