It was a good year for individual account plans, including 401(k)s and 457s. In fact, 2017 may go in the record books as the first year the number of plans with an average auto-enrollment deferral rate of 6% exceeded the number of plans with a default deferral rate of 3%, as it has commonly been.
Consult your plan’s financial, legal or tax advisor regarding these and other items that may apply to your plan.
For 2018, taxpayers may only deduct interest on $750,000 for qualified residence loans taken out after Dec. 15, 2017. This new limit applies to the combined amount of mortgage and home-equity debt. In addition, the new limit applies only to loans used to buy, build or improve the taxpayer’s main home and second home, according to the IRS. Taxpayers no longer can deduct a home-equity line of credit for any purpose.
Source: irs.gov.
September Checklist:
• Begin preparing the applicable safe harbor notices to employees, and plan for distribution of the notices between October 2 and December 2 (calendar-year plans).
• Distribute the plan’s Summary Annual Report by September 30 to participants and beneficiaries, unless an extension of time to file Form 5500 applies (calendar- year plans).
• Send a reminder memo or email to all employees to encourage them to review and update, if necessary, their beneficiary designations for all benefit plans.
Municipal Bonds
These are debt securities that are created when a state, county or municipal government embarks on a new project like a new school, water treatment plant, or road, and looks for investors to help finance it. Municipal bonds are exempt from federal income taxes and many are issued with exemptions from state and local taxes, meaning that investors keep more of the income generated from the securities.
