Local CPA educates members about changes in the SECURE Act
Welcome handshakes at the door always make Rotary members and guests feel at home. Board members Wayne Hiett and Dean Fiedler greeted us on January 15.
After President Martha Ripley rang the bell to start the meeting, Wayne began the Pledge of Allegiance for everyone to dutifully follow along and Dean offered an excellent inspiration from Martin Luther King, Jr., in honor of the day named for him.
Peter Edwards kept us all singing tunes we remember from our youth as he played a medley of Beatles songs, including the favorite “Lucy in the Sky with Diamonds.” Peter explained the acronym does not refer to LSD, as so many conjectured. Rather, he says, the name of the song was taken from a crayon drawing done by John’s son.
Guests/Visiting Rotarians
Ryan introduced guests, including Larry Kelp with the Veterans Corps Missoula, a guest of Kurt Ingold; Patty Schulte, guest of Kathy Schulte; Jeanne Jenkins, a guest of Dolores Bandow and who served on the board with Dolores years ago.
Auction
Mike Schauf did the honors as auctioneer to raise funds for our Avenues of Service projects. Thanks to the Rotary Club of Polson, our club was able to auction a lovely basket of Mexican-themed goods, a “pay it forward” gift from the Polson Club. District Governor Sandy Wong began the “pay-it-forward” project as a way for clubs around the district to connect through sharing. Rotary Clubs send a gift to the next club the DG is visiting and that club can auction it for its own service projects. DG Sandy says that clubs have passed along a variety of gifts that are meaningful to their home club, including tickets to sporting events, stays in local hotels, local brewery specialities, gardening tools, and more. The Polson Club’s basket included two bottles of Cuervo, margarita mix, glasses and other items for having a marvelous Cinco de Mayo celebration. Wayne Hiett and Bob Minto shared the winning bid of $100.
Announcements
Otto Koester announced that the Mansfield Center is seeking hosts for visitors from other countries as part of the UM’s agreement with the U.S. State Department. Anyone interested in serving as host for a weekend or up to three weeks, let Otto know. There are visitors from various countries, some here for only a short visit and others for a lengthier one.
Membership Chair Dan Buchta encouraged members to invite more guests to our club meetings. That is one way to introduce Rotary to potential new members and share our mission.
President Martha announced that we will hold a meeting on January 22. Marcia Hogan will be next week’s speaker. She said that we will also meet the next conductor candidate for the Missoula Symphony at next week’s meeting.
Speaker
Kurt Ingold introduced speaker Nicole Reicker, CPA, M.Tax, who manages the local office of CPAs JCCS. Nicole said she raises chickens, too, and could talk lots about them, if anyone was interested.
Nicole offered an update on new federal tax legislation passed December 2019 called the SECURE Act. The legislation has implications for tax and retirement planning. The acronym stands for “setting every community up for retirement enhancements.”
Highlights from the legislation include;
- IRA deposit age limit has been removed. Previously, one could not make contributions with earned income the year in which one turns 70.5 years of age. That is no longer the case. One still must have earned income and, Nicole says, it is good to double check if thinking about QCD.
- IRA RMD age rule increased from 70.5 to 72 years old.
- Inherited IRA changes — non-spouse now limited to 10-year withdrawal period. Does not apply to spouse or minor children, disabled or chronically ill beneficiaries, or someone less than ten years younger than the deceased.
- New exception for IRA early withdrawal penalty. Penalty exemption of $5,000 if within one year of birth or legal adoption finalization. Applies to IRAs and Qualified Defined Contribution Plans. Amounts may be redeposited without penalty within one year. Both parents may use, so potentially $10,000.
- Taxable stipends and fellowships qualify for IRA.
- Changes to workplace retirement. Longterm, part-time workers can join 401(k) plans. Tax credits for small business starting a retirement plan. Auto enrollment cap increased to 15%. Allows lifetime income investment to be distributed from your workplace retirement plan. Increases transparency into retirement income with “lifetime income disclosure statements.”
- Qualified tuition programs (Section 529 Plans). Can now pay for student loans.
- Apprenticeship programs also qualified. Programs must be registered with the Department of Labor. There is an apprenticeship program in accounting at Missoula College.
- Increase late fee for failure to file partnership and S-corporation. Now $400 per partner per month if extension has not been filed. There is a small partnership exception, but the company must be otherwise compliant.
- New rules — back to the old rules. An amendment to the 2018 and 2019 tax rules. Kids are now subject to single rate or parents rate, applies when unearned income exceeds $1,100.
- SECURE Act extenders: Extended retroactively – 12/31/2020.
- Personal Residence debt discharged exclusion
- Mortgage insurance premiums allowed as mortgage interest
- Medical expense floor goes back to 7.5% (from 10%)
- Tuition deduction
- Racehorses as 3-year life assets
- Indian employment credit and accelerated dep.
- Expensing of film/TV/theatrical productions
- Alternative fuel refueling property credit
- 2-wheel plug-in electric vehicle credit
- Energy efficient new home credit
- New markets credit
- Employer credit for family leave
- Work opportunity credit
- Who knew? Nicole explained that the new tax law also increased the legal smoking age to 21.
- State and local tax deduction is still limited to $10,000.
Nicole reminded everyone to check their W-4 forms carefully this year as so many items have changed.
President Martha awarded Nicole a “million-dollar” chocolate bar and thanked her for her presentation. A book will also be donated to a local middle school in Nicole’s name.
The meeting was adjourned.