Other Retirement Plan Points of Interest

• Participants with after-tax dollar contributions to their 401(k), 403(b) or 457(b) accounts are now able to separate upon distribution the pre-tax from the after-tax dollars. The after-tax contributions are not the same as a Roth 401(k). These after-tax monies are contributed to the traditional 401(k).
• Funds from an inherited IRA are not considered retirement funds for purposes of qualifying for an exemption from a debtor’s bankruptcy estate. This affects non-spousal beneficiaries.
• One IRA Rollover per year limit: An individual is allowed only a single IRA rollover per year. The original interpretation of the code was that an individual was allowed one IRA rollover per year per IRA. So, if an individual had two IRAs then they would be able to perform two rollovers per year. This change in interpretation has raised the stakes drastically on using IRA assets as a short term loan.

Other Tax Law Points of Interest

• The annual gift tax exclusion remains at $14,000 for 2015.
• The standard deduction will increase by $100 from $6,200 to $6,300 for single filers. Married couples filing jointly will increase from $12,400 to $12,600. For taxpayers who itemized their deductions, the Pease Limitation has increased to $258,250 from $254,200 for single filers and to $309,900 from $305,050 for married couples filing jointly.
• The personal exemption will increase by $50 from $3,950 to $4,000. The Personal Exemption Phaseout (PEP) starting point has increased to $258,250 from $254,200 for single filers and to $309,900 from $305,050 for married couples filing jointly. The personal exemption is completely phased out at income levels of $380,750 and $432,400.
• The Alternative Minimum Tax exemption has been raised to $53,600 from $52,800 for single filers. Married couples filing jointly will have an $83,400 exemption in 2015 compared to $82,100 in 2014.

At Riverview Capital, our priority is to continuously seek opportunities that can enhance and improve your overall financial well-being. Solutions that can alleviate tax law changes are customized to your specific needs. We welcome the opportunity to review and discuss these potential solutions with you. Feel free to call Riverview to determine your options.

SOURCES:

1. 2014 Thornburg Investment Management, Inc.
2. Tax rate data from IRS
3. Corporate and Municipal bond data were obtained from Barclays

Contributors: Paula Pienkowska is Director of the Wealth Advisory Group at Riverview Capital Advisers. Alan Arcadipane is a Business Analyst of the Business Advisory Group at Riverview Capital Advisers. Peter Gnall is a Private Wealth Adviser of the Wealth Advisory Group at Riverview Capital Advisers. Melysa Latham is a member of the Business Advisory Group at Riverview Capital Advisers.