Revenue Reconciliation Act - nickels and dimes add up
Article Abstract:
The Revenue Reconciliation Act of 1990 implements significant changes that are both diverse and complex in tax law. The act has increased excise, employment and income taxes. The Act eliminates the 33% tax rate 'bubble' and moves those taxpayers to the 31% rate, but the elimination of reductions for taxpayers making over $100,000 a year means that those taxpayers actually will be taxed at an effective rate of 31.93%. Changes in the tax law affect the areas of: employment taxes, including payroll taxes, Social Security coverage, and the FUTA surtax; excise taxes, including user fees, gas guzzling cars, and luxury items; qualified plans, including PBGC insurance premia, reversion of excess assets, and transfer of excess assets to retiree health accounts; corporations, including transfers of family businesses, corporate spin-offs, and the reporting of stock and asset acquisitions; and procedure, including the accuracy-related penalty and compliance provisions.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1990
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Nondiscrimination Regs., now final, add safe harbors
Article Abstract:
The IRS has issued five sets of final nondiscrimination Regulations that specify how qualified retirement plan sponsors can comply with the requirements of Section 401(a)(4) of the Tax Reform Act of 1986. The new Regulations outline two paths that can be used to test whether a plan meets the requirements of Section 401(a)(4). One can be used for plans with safe harbor features. The other is a general testing procedure that can be used for plans without safe harbor features. Whichever path is taken, plan design and its operational effect remain the most important criteria examined in nondiscrimination testing. The Regulations also provide a grace period for retroactive corrections in the design of plans found to be discriminatory.
Publication Name: Taxation for Accountants
Subject: Business
ISSN: 0040-0165
Year: 1992
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