Congress is considering proposals right now to take away the tax advantages of your 401(k).
To help finance the tax reforms being proposed, Congress is eyeing axing the up-front tax deduction for 401(k) contributions. And one proposal would also change the tax-deferred nature of 401(k)s by imposing a 15% tax on your annual gains.
Why would Congress consider tinkering with the tax benefits of such a popular program as the 401(k)?
For the same reason that notorious holdup man Willie Sutton gave for robbing banks:
Because that’s where the money is!”
The current taxation of 401(k) plans was estimated to have cost the federal government more than $90 billion in potential tax revenue last year alone, according to the Joint Committee on Taxation. [Read more…] “Congress Considers Axing Your 401(k) Tax Deduction”