Yes, but not in California. Still $2,000 or Roth IRA. California does not follow Federal Law when it comes to things like 401K, or Roth. There is a bill the is going to be introduced to rise it to the federal level, but that wont take place until 2002.
Those new U.S. tax breaks not law here State has not adopted the more generous retirement-plan contributions. December 5, 2001 By HANH KIM QUACH The Orange County Register SACRAMENTO -- Before you reset the limit on your 401-k plan or set aside the extra money for your IRA, be aware. Even though the federal government says you can contribute more to your retirement kitty, California law doesn't yet allow it. Taxpayers who try to claim the higher contributions on their 2001 state tax returns could be penalized, or even blocked. That's because California does not automatically adjust its tax codes to mirror federal laws, allowing the state Legislature and its analysts to decide what the effect would be on the state budget before adopting the changes. Assemblyman John Campbell, R-Irvine, a former accountant, calls this failure to reconcile the two plans "a disaster waiting to happen." Campbell said he will introduce a bill Friday that will force California to mirror the 85 changes in federal law. So far, California has adopted one change. But Campbell's bill - which would not go into effect until the 2002 tax year at the earliest - will face a tough challenge in the Capitol. Adopting the new federal tax-relief provisions would mean about a $100 million loss to the state budget. That's one-tenth of one percent of the state budget. But with projections that the state will face a $12.4 billion shortfall next year, lawmakers may find it difficult to part with any amount of cash. "We will have a very tough fiscal year in 2002-03, so we'll have to look very closely at any measures that will reduce our revenues," said Sen. Jack Scott, the chairman of the Senate Revenue and Taxation committee. If the state adopted the tax incentives "we'd have to make subsequent cuts to state programs to compensate for it." Because of the current discrepancy, if a Californian contributes $3,000 to his IRA - rather than the $2,000 allowable by the state - he would have to pay a $25 penalty if he mistakenly claimed all $3,000 on his state income tax return. He would also have to pay any interest on that $25 penalty and would have to pay taxes on any gains that $1,000 earns. Taking all of that into consideration, it would be easier and possibly cheaper to just contribute at the lower amount, Campbell said. In addition, the failure of the laws to agree affects workers who want to roll their retirement money into a single account. Federal law will allows this without penalty in 2002; state law will not, meaning such transfers could be prohibitively expensive. In some instances, their retirement accounts could be "disqualified" by the state and they could be taxed on the entire amount in the account. Karen Hochwald, an Irvine homemaker, said she's angry that she won't be able to contribute a combined $6,000 in her family's IRAs. "This state has a history of being fiscally irresponsible," Hochwald said. "Whenever there's a surplus, they don't save it, they come up with new programs. If they have to cut programs so that working men and women can save money to retire, then I'm afraid they'll have to cut programs." California has not conformed with federal tax law since 1998, although most of those changes don't affect the typical taxpayer. Lenny Goldberg of the California Tax Reform Association said the way to balance the books and allow taxpayers to benefit from the relief plans is to get rid of some of the corporate tax breaks that California allows, but the federal government does not. For instance, in 1993, the federal government prohibited corporations from claiming as deductions the salaries of highly paid executives and employees' company-paid club dues. Federal law also prevents businesses from claiming lobbying expenses as deductions, said Jean Ross, executive director of the California Budget Project. At 10:56 AM 12/6/2001 -0600, you wrote: >Don't the ROTH go to $3000 year this year? I lost track of that? -Gary > > > -----Original Message----- > > From: Jacob [mailto:[EMAIL PROTECTED]] > > Sent: Thursday, December 06, 2001 10:17 AM > > To: CF-Community > > Subject: RE: Well, add another black day to the list... > > > > > > Trust me, those at Enron should be strung up from the highest oak tree >in > > Houston... > > > > I know about 401Ks and IRAs. I have a Roth IRA, and I have helped my d >ad > > with is 401K. He was losing money in it mostly in company stock. > > He never > > > > looked at his 401K since the company started it. Last year, even in a >bad > > > > year for the stock marker, he was about to gain 14% for the year in his > > 401K with less that 15% in company stock. > > > > All 401Ks have at least 6 to 10 choices. Some are crappy, like bonds, >but > > > > some 401Ks I have seen have had at least one or two funds that are > > respectable. If your 401K at work is crummy, then invest less in the 4 >01K > > > > and more in something like a Roth IRA. I max out $2000 per year > > in my Roth > > > > IRA for the last 3 years and so far I have been happy. > > > > Never put all your eggs in one basket... > > > > > > At 09:18 AM 12/6/2001 -0600, you wrote: > > >Sadly, much is 401(K,B, whatever) money Jacob. Many companies greatly > > > limit > > >where 401 money can be invested and what you can invest it in. In ord > > >er to > > >get the tax advantages of a 401K (pre-tax withdrawal) you have to use > > > the > > >companies plan. Sometimes they will not match you unless you choose t > > >heir > > >stock). Also, when a company is run correctly (legally?) and the stoc > > >k is > > >rocking ($80+) then you might think it is a great plan. Also, many pe > > >ople > > >are "incentives" to work by getting stock that has a significant valu > > >e. > > >Again, if the company is run well. > > > > > >It's almost like forcing people who work for you to invest in your st > > >ock > > >which you get the proceeds of as well as the proceeds of the company. > > > You > > >win either way or both ways while the going is good. > > > > > >The gist is that most people are not prepared to manage the complexit > > >ies of > > >their own portfolio. They have neither the time nor expertise. If thi > > >s does > > >not scare you away from the new Social Security plan, I don't know wh > > >at > > >will. Everyone who is jumping on that band wagon seem to think stocks > > > only > > >go up, and for awhile they did, but they can go down too. A lot of pe > > >ople > > >know that now. > > > > > >What the leaders of Enron (and some shareholders too) did there is cr > > >iminal, > > >pure and simple. But I don't think much will happen. The assets of th > > >e > > >company are gone. The corporate veil is in place. The same types of m > > >en run > > >the country and legal system and have an interest in not doing anythi > > >ng. It > > >could be them next week. There is almost zero news about it, so no an > > >gry > > >crowds out there demanding justice. > > > > > >-Gary > > > > > > > -----Original Message----- > > > > From: Jacob [mailto:[EMAIL PROTECTED]] > > > > Sent: Thursday, December 06, 2001 8:49 AM > > > > To: CF-Community > > > > Subject: Re: Well, add another black day to the list... > > > > > > > > > > > > Something to learn from this: never have more that 10% of your > > > > portfolio in > > > > > > > > your company's stock. > > > > > > > > At 11:47 PM 12/4/2001 -0600, you wrote: > > > > >Enron in Houston just laid off 5,000 people. Most lost their entir > > >e > > > > >retirement (401K was tied to the company stock). And the big guys > > >wal > > > > >ked > > > > >away with hundreds (read 2.5+) hundreds of millions of dollars. We > > >ll, > > > > >business in America, capitalism and all that. Rich get richer and > > >mid > > > > >dle > > > > >class take the beating. And all it gets on FOX/News is a scrolling > > > li > > > > >ttle > > > > >line at the bottom of the page while a sad puppy-eyed bubble heade > > >d b > > > > >leach > > > > >blonde talks about OJ being in trouble again. Hello!!! Who gives a > > > sh > > > > >it? > > > > >Good God man. Liberal media? Bah. > > > > > > > > > >Sad thing is, I believe in the principles of capitalism, only regu > > >lat > > > > >ed. > > > > >Unregulated it is highly destructive. Anything goes. Some of you a > > >re > > > > >feeling > > > > >the pinch of this even now. It will be a travesty of law and an in > > >dic > > > > >tment > > > > >of the business laws in this country if these men walk away with a > > > ce > > > > >nt from > > > > >this. Hell, that happens in third world countries all the time. Th > > >ey > > > > >should > > > > >all go to prison - for life. Only the "corporate veil" will shield > > > th > > > > >em. 1/2 > > > > >billion in money that was out and not on the books (neat little lo > > >oph > > > > >ole, > > > > >don't own more than 50% in a company, don't show the money on the > > >boo > > > > >ks). > > > > >And the Bush plan to give money back to all these poor companies t > > >hat > > > > > are > > > > >just struggling in the current climate (what, they did not save mo > > >ney > > > > > for a > > > > >rainy day?) will be giving money BACK to Enron under the law. Ugh. > > > > > > > > > >Man, how many lives did these few people just trash? Right before > > >Chr > > > > >istmas > > > > >(reminiscent of Exxon\Mobil merger last year) and in a down and ou > > >t e > > > > >conomy. > > > > >Like the guy said after the S&L scam of the 80's, "I wish someone > > >had > > > > > robbed > > > > >me and broken my arm. I could recover from that. I have lost every > > >thi > > > > >ng I > > > > >worked a lifetime for and have no way to recover it now." (closely > > > > >paraphrased). These people have too much power to affect to many l > > >ive > > > > >s and > > > > >to little regard for those lives. I bet none of these men are loos > > >ing > > > > > a > > > > >minutes sleep over this. > > > > > > > > > >Funny, we punish the hell out of blue collar crime and reward whit > > >e c > > > > >ollar > > > > >crime. Only... it does billions of dollars of damage annually and > > >aff > > > > >ects > > > > >countless lives. > > > > > > > > > >Gary P. McNeel, Jr. > > > > >MyKitPlane.com > > > > >[EMAIL PROTECTED] > > > > >http://www.mykitplane.com > > > > > > > > > >What's the hurry? Are you afraid I won't come back? > > > > > > > > > >� Manfred von Richthofen, 'The Red Baron,' last recorded words, > > >in > > > > >reply to > > > > >a request for an autograph as he was climbing into the cockpit of > > >his > > > > > plane. > > > > > > > > > > > > > > > > > > > > ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Your ad could be here. Monies from ads go to support these lists and provide more resources for the community. http://www.fusionauthority.com/ads.cfm Archives: http://www.mail-archive.com/[email protected]/ Unsubscribe: http://www.houseoffusion.com/index.cfm?sidebar=lists
