With the holidays coming up, there is a lot of uncertainty in the retirement savings industry.
For many, the uncertainty is coming because of the potential tax holiday that could impact their investments.
While the IRS doesn’t have a specific date set for the holiday, some are calling for it to be announced early this year.
But the tax holiday is also going to impact everyone, including those who save for retirement.
So if you are one of those who has a retirement plan or a nest egg that is growing, this could affect your financial well-being.
Here’s what you need to know.1.
There is a $4 billion tax holiday in effect for people who earn over $1 million.
It kicks in on Jan. 1, 2018 and lasts until Dec. 31, 2027.2.
People who earn $1,000,000 or more each year will save $2,000 in tax-free savings.3.
People earning less than $250,000 will save only $1.5 million, down from $2.6 million, according to the IRS.4.
If you don’t qualify for the tax-holiday savings boost, you’ll pay a $5,000 penalty.5.
If your IRA accounts are under $10,000 and you make $250 or less each year, you won’t qualify.
If you are interested in reading more about the tax holidays and how to prepare for them, visit www.irs.gov/irs-guide/tax-holiday-planning-tax-hikes.