Retirement Rewards
A new act makes life less taxing on you.
When planning this year's tax strategy, take advantage of tax benefits offered by retirement plans. Thanks to the Economic Growth and Tax Relief Reconciliation Act of 2001, you can save up to $11,000 in a 401(k) plan this year. The maximum contribution will rise $1,000 a year until 2006, when it reaches $15,000.
The tax law changes also provide incentives to launch a retirement plan. For example, business owners "can get a loan from these plans under the same rules as everybody else," says Karen Field, a senior manager in KPMG's Washington, DC, national tax practice. Business owners didn't like locking up capital in a 401(k) plan without the ability to get it out in emergencies, she says.
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