FSI Tax Corp Reveals Pension Law Highlights

Tax resolution company reveals major tax code changes, charitable donation regulations and other highlights of the Pensions Protection Act that will affect taxpayers and retirees.

(PRWEB) September 9, 2006 -- Following the August 17, 2006, ratification of the Pension Protection Act, Maryland-based FSI Tax Corp released an article informing taxpayers and retirees of major aspects of the law including tax breaks and other provisions.

The act, which addresses the nation-wide problem of under-funded pension plans, requires companies to fully fund pensions but also encourages individual employees to increase personal retirement contributions through a variety of provisions.

“Many of the changes enacted by the law come in the form of tax breaks for employees,” said Michael Smith, Managing Authorized Taxpayer Representative at FSI Tax. “The law expands allowances and makes it easier for individuals to increase retirement savings.”

The majority of the Pension Protection Act aims to ensure that companies fully fund traditional pension plans over a seven-year period, starting in 2008.

The law also makes permanent several tax cut laws enacted in 2001 that were set to expire including the tax credit for low-income workers called the Saver’s Credit and tax-free withdrawals on 529 college savings plans. It also made permanent the increased retirement account employee contribution limits.

Legislation regulating charitable giving donations is strengthened by the law as well. Monetary donations require receipts, cancelled checks or bank statements for verification and non-monetary donations require documentation or appraisal for donors to receive tax deductions.

To promote retirement planning employers are allowed to automatically enroll employees in 401(k)s under the law. Employers can also provide professional advice to encourage workers to try riskier investments that could lead to larger returns.

Critics claim that multiple provisions aimed at promoting individual participation may be a step toward employee-funded retirement plans.

“We support tax code changes that encourage retirement savings and promote personal responsibility,” said Smith. “But these provisions should not take accountability away from employers whose job it is to provide employees with their entitled benefits.”

For more information on the Pension Protection Act and changes to the tax code go to fsitax.com.

About FSI Tax Corp:
FSI TaxTM was established in January of 2004 with a mission to provide top-quality federal tax resolution services to taxpayers seeking compliance with the IRS. For more information about FSI Tax and the services they provide, please call 888-437-4669 or visit their website at fsitax.com.

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