Embracing the Freelance Lifestyle: Understanding the SECURE Act 2.0
Hello, fellow freelancers! Let’s talk about something crucial that’s been on my mind – the SECURE Act 2.0. Passed in 2020, this legislation has significant implications for those of us running freelance businesses. Whether you’re a solopreneur or managing a team, it’s crucial to understand this.
So, what’s the big deal with the SECURE Act 2.0? It’s all about retirement plans. The Act reduces the costs related to setting up and managing these plans, increasing the credits available for us, the employers. That’s a big win for us!
Roth Contributions and The SECURE Act 2.0
Another significant change brought about by the SECURE Act 2.0 is the allowance of Roth contributions for SIMPLE and SEP IRAs. This means that we can now make post-tax contributions to these accounts, which can be a great strategy for future tax savings.
But that’s not all. Starting in 2024, we can choose to allow non-highly compensated employees to make Roth contributions to an emergency savings account linked to their IRA. This is a fantastic opportunity to empower our employees to save and plan for their future.
Part-Time Employees and Retirement Plans
The SECURE Act 2.0 also has provisions for part-time employees aged 21 and over. Those who work 500 hours a year are now eligible to participate in 401(k) and 403(b) plans. This is a significant step towards inclusivity and fairness in the workplace, and it’s something I’m personally very excited about.
Implementing these changes in our businesses can be tricky, but thankfully, we’re not alone. Professionals like Jonathan Medows, a NYC-based CPA who specializes in taxes for freelancers, offer free consultations to members of the Freelancers Union. You can check out his services here.
Final Thoughts
The SECURE Act 2.0 is a game-changer for freelancers and small business owners. It’s all about making retirement plans more accessible and affordable, and that’s something we can all get behind. Stay informed, fellow freelancers, and let’s continue to thrive!
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