New Tax Changes: Some Good, Some Bad

Bankrate.com has an article about new tax laws that will mostly take effect in 2007.

I'm most impressed with extending the contribution limits to Roth IRAs. Previously, these limits would have expired in 2010. Now, in 2008, if you qualify, you'll be able to contribute up to $5,000 a year to a Roth IRA. After that, the limits will be adjusted for inflation. That's great news for savers who want to build up a retirement fund from which they won't have to pay taxes when they withdraw (after 59 1/2 of course).

Another provision extended the tax-free distributions from 529 savings accounts (you know, the education funds). This tool was expected to expire in 2010, too, but Congress made them permanent. So if you have children and expect them to attend college, this would be a great way to invest some money and try to keep on top of tuition inflation (currently around 7% a year).

There are 10 distinct changes to the tax code that the bill from Congress addressed. Read the article to see how these could effect you.