Daniel Cuddy photo
Cuddy Financial Services logo

Daniel R. Cuddy, CPA, CFP®

Personal Financial Representative

 

Cuddy Financial Services

7 William Street

Auburn, NY 13021

 

Phone:  315-252-3600

Fax:      315-252-3625

 

Email: dcuddy@cuddyfinancial.com

2023 Tax Planning Guide

SECURE 2.0 Act for Businesses

LARGER TAX CREDIT
Employers with 50 or fewer employees get a tax credit equal to 100% of qualified start-up costs for a 401(k) or 403(b) plan. Additionally, plan sponsors may receive another credit for five years up to $1,000 per employee if they meet certain requirements. These credits phase out for employers with 51-100 employees.


MANDATORY AUTO MATCH
Businesses operating at least three years and sponsoring 401(k) plans with at least 11 employees must automatically enroll their workers in their plans at a rate between 3% and 10% and payroll-deduct contributions at an additional 1% annually until reaching 10%. They may deduct contributions up to a maximum of 15% afterward. Smaller or newer businesses are exempt from this requirement. Employees may opt out.


OPERATIONAL AND COMPLIANCE CHANGES
A laundry list of changes will change how plans operate and comply with regulations. They include: receiving nine and a half months after a plan year to correct reasonable errors administering auto enrollment and contribution escalators, getting more leeway to self-correct some compliance issues, modifying top-heavy testing, effective in 2024 and the ability to offer small incentives, such as gift cards, to encourage employees to participate in their plans. Also, new guidance about benchmarking target date funds against indices and a federal “lost and found” database to find lost retirement savings are expected in 2024.


TAX CREDITS FOR DOING GOOD
Small businesses allowing military spouses to immediately contribute to and vest in any employer matches in their retirement plans qualify for an annual tax credit of $200 per each spouse of an active military member.


Understand that this list of changes is not exhaustive and some specifics may change over the next year, so consult your tax professional.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox.

Please include name of person that directed you to my online tax guide so I can thank them personally.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

Cuddy Financial Services and LTM Client Marketing are unrelated companies. This guide was created by LTM Client Marketing and was not written or created by the named financial professional and does not necessarily represent the views and opinions of Avantax Wealth Management® or its subsidiaries.
Avantax affiliated advisors may only conduct business with residents of the states for which they are properly licensed and registered. Securities offered through Avantax Investment Services, Member FINRA, SIPC, Investment advisory services offered through Avantax Advisory Services, Insurance services offered through an Avantax affiliated insurance agency. Not all products and services are offered by all financial professionals. Products and services listed may only be offered by properly licensed individuals.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.