Outgoing House Ways and Means Committee Chairman Kevin Brady, R-TX, wants one more tax bill to his name.

Brady’s new tax and oversight package, which he introduced late Monday night, includes retirement plan and savings enhancements, a sizeable tax credit for small business startups, tax relief for new parents and a modernization of the Internal Revenue Service.

Brady, chief architect of the massive Tax Cuts and Jobs Act 2017, said he wants to pass this bill during Congress’s lame duck session, which could end as early as December 7. To expedite the legislation, the House may vote on the nearly 300-page bill – the “Retirement Savings and Other Tax Relief Act of 2018” -- by the end of the week and then send the package on to the Senate for deliberation. Because the GOP lost its majority in the House November 4, Brady will hand over leadership of the committee to Democrats at the end of the lame duck session.

“This broad, bipartisan package builds on the economic successes we continue to see throughout our country,” Brady said. “The policy proposals in this package have support of Republicans and Democrats in both chambers.  I look forward to swift action in the House to send these measures to the Senate.”

On the retirement front, the bill reintroduces key changes that have previously cleared the house, including provisions that would:

  • Make it easier for employers to offer annuities in their retirement plans. Annuities can help employees use their plan savings in a way that resembles a traditional pension with a monthly paycheck guaranteed for life;
  • Expand access to retirement plans by making it much easier for small employers to band together to enjoy cost savings in order to offer a multi-employer retirement plan (MEP) to employees.
  • Advance consumer financial education by ensuring all workers receive an illustration of how their workplace retirement savings translates into monthly income;
  • Continue lifetime income protections for savers who participate in plans undergoing changes.
  • Allow individuals to contribute to traditional Individual Retirement Accounts (IRAs) past the age of 70 ½.
  • Give individuals that ability to make penalty-free withdrawals of up to $7,500 from retirement accounts for the birth or adoption of a child.

TD Ameritrade did not offer specific comment on this particular bill but voiced support for its general objectives. “[W]e are in favor of measures that would help more Americans increase retirement savings, advance financial education and provide needed protections for Main Street investors.” Said Skip Schweiss, managing director of TD Ameritrade Institutional, Schweiss is also the firm’s head of Retirement Plan Services.

“The retirement security provisions offer lawmakers the opportunity to continue the work they began earlier this year and help generations of Americans secure their retirements for life. They will enhance and expand access to America’s retirement system, with a much-needed focus on small employers, said American Council of Life Insurers President and CEO Susan Neely.

“Every day, 10,000 Americans reach age 65,” Neely continued. “And, many people can expect to live 20 years, 30 years or longer in retirement. The retirement security provisions in Chairman Brady’s tax bill will go a long way toward helping Americans save for retirement and ensure their savings will last a lifetime.”

On the tax front, another highlight of the bill would allow start-up businesses to deduct up to $20,000 in start-up expenses. This provision was previously included in the Tax Reform 2.0 package released earlier this year. It also provides disaster relief assistance to individuals impacted by natural disasters in 2018, including Hurricanes Florence and Michael, western wildfires, and weather events in Hawaii.

Brady’s bill would also extend a number of tax provisions that expired at the end of 2017. This list of provisions, commonly known as “extenders,” includes provisions related to alternative fuels, private mortgage insurance, and the depreciation of race horses and NASCAR facilities. The provision related to biodiesel would be extended until 2021, and then phased out by 2025.

The bill includes several “technical corrections” to the Tax Cuts and Jobs Act of 2017. It would clarify that qualified improvement property can be immediately deducted and clarifies an issue with the treatment of net operating losses.

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