Author Topic: IRS announces 401(k) limit increases to $20,500  (Read 1607 times)


Steeze

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BZB

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Re: IRS announces 401(k) limit increases to $20,500
« Reply #2 on: November 04, 2021, 05:59:36 PM »
Nice! I can squirrel a little more money away.

effigy98

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Re: IRS announces 401(k) limit increases to $20,500
« Reply #3 on: November 04, 2021, 06:39:33 PM »
The rich get richer... Thank you IRS.

Much Fishing to Do

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Re: IRS announces 401(k) limit increases to $20,500
« Reply #4 on: November 05, 2021, 05:28:43 AM »
The rich get richer... Thank you IRS.

No kidding.  Always one of my biggest gripes with basic tax breaks is how this practically speaking works.  Not that the wealthier gets a larger break in absolute dolalrs, that's just the math of the fact they pay a higher tax rate on more dollars.  But when I had my crappiest job, all I could get a tax break on was the $3k (or whatever the limit was then) for an IRA, b/c crappy jobs dont offer 401ks.  Then I had a decent job and could shelter a lot more with my 401k.  Then I built a successful business, and was allowed to put away $50k/year tax free in a solo.  I never learned much about NQDC but that just seems one more level.

kenaces

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Re: IRS announces 401(k) limit increases to $20,500
« Reply #5 on: November 05, 2021, 07:47:12 AM »
The rich get richer... Thank you IRS.

No kidding.  Always one of my biggest gripes with basic tax breaks is how this practically speaking works.  Not that the wealthier gets a larger break in absolute dolalrs, that's just the math of the fact they pay a higher tax rate on more dollars.  But when I had my crappiest job, all I could get a tax break on was the $3k (or whatever the limit was then) for an IRA, b/c crappy jobs dont offer 401ks.  Then I had a decent job and could shelter a lot more with my 401k.  Then I built a successful business, and was allowed to put away $50k/year tax free in a solo.  I never learned much about NQDC but that just seems one more level.

If you want to complain about "rich getting richer" consider that 19,500 to 20,500 increase in 401k deduction is TINY compared to the current proposal in Congress to increase the SALT credit from 10,000 to 72,000!

yachi

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Re: IRS announces 401(k) limit increases to $20,500
« Reply #6 on: November 05, 2021, 08:29:06 AM »
The rich get poorer... Thank you inflation.

innkeeper77

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Re: IRS announces 401(k) limit increases to $20,500
« Reply #7 on: November 05, 2021, 03:22:38 PM »
The rich get richer... Thank you IRS.

The rich get poorer... Thank you inflation.

What website am I on again? Though, if the rich getting richer is referring to this being a 401k increase while ignoring IRA's, that is a fair point.

PDXTabs

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Re: IRS announces 401(k) limit increases to $20,500
« Reply #8 on: November 05, 2021, 03:31:01 PM »
Nice! I can squirrel a little more money away.

The rich get richer... Thank you IRS.

You can put the same amount of real dollars in.

magus

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Re: IRS announces 401(k) limit increases to $20,500
« Reply #9 on: November 05, 2021, 04:56:55 PM »
The rich get richer... Thank you IRS.

No kidding.  Always one of my biggest gripes with basic tax breaks is how this practically speaking works.  Not that the wealthier gets a larger break in absolute dolalrs, that's just the math of the fact they pay a higher tax rate on more dollars.  But when I had my crappiest job, all I could get a tax break on was the $3k (or whatever the limit was then) for an IRA, b/c crappy jobs dont offer 401ks.  Then I had a decent job and could shelter a lot more with my 401k.  Then I built a successful business, and was allowed to put away $50k/year tax free in a solo.  I never learned much about NQDC but that just seems one more level.

NQDC plan 1) is at risk in bankruptcy, 401k is not and 2) must ALL be distributed within 5 years of separation from your job. It's VERY easy to end up paying WAYYY more in taxes with a NQDC plan than not doing one and you could get nothing.

Main thing with tax breaks is that 50% of the country has already had some many tax breaks that pay absolutely no income tax so there is nothing to cut. That's one of the reasons every tax cut looks like a tax cut for the "wealthy" - top 10% pay over 70% of all fed income taxes vs ~40% 40 years ago.

magus

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Re: IRS announces 401(k) limit increases to $20,500
« Reply #10 on: November 05, 2021, 05:01:50 PM »
The rich get richer... Thank you IRS.

No kidding.  Always one of my biggest gripes with basic tax breaks is how this practically speaking works.  Not that the wealthier gets a larger break in absolute dolalrs, that's just the math of the fact they pay a higher tax rate on more dollars.  But when I had my crappiest job, all I could get a tax break on was the $3k (or whatever the limit was then) for an IRA, b/c crappy jobs dont offer 401ks.  Then I had a decent job and could shelter a lot more with my 401k.  Then I built a successful business, and was allowed to put away $50k/year tax free in a solo.  I never learned much about NQDC but that just seems one more level.

If you want to complain about "rich getting richer" consider that 19,500 to 20,500 increase in 401k deduction is TINY compared to the current proposal in Congress to increase the SALT credit from 10,000 to 72,000!

80k now and no kidding! 99%+ of this tax cut goes to those making over $100k a year! The average person under $100k that even benefits from this will save $20 a year. Yes twenty dollars. I would meanwhile save about $20,000 next year. Fine with me but probably not a great use of tax dollars.
« Last Edit: November 05, 2021, 05:36:27 PM by magus »