We can disagree, but the theory on the Hill is that this stuff has been out there for months, so there's no problem making it retroactive like that. There is no constitutional problem with it being retro, it's just the political problem. This is seen as something that makes the rich pay their fair share.

AggiEE said:

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YouBet said:

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FYI - the billionaires wealth tax has been cut from the bill. Pelosi didn't want it because I guess too many of her friends were impacted.

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Carried Interest restrictions for PE were also cut.

Funny how this bill does a lot to prevent middle class earners from contributing to a Roth, but allows the extremely rich to continue on with their much more unfair loopholes....

Bill is disgusting. Should be retitled from "Build Back Better" to "Benefit Bimodel Better" since it basically mostly harms the middle class.

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This whole administration should change from the Biden administration to the SCREW THE MIDDLE CLASS ADMINISTRATION

I believe the current bill has removed the ability to use a Backdoor Roth unfortunately but has increased the SALT tax deduction (helpful for me since I have state income taxes here in Colorado).

OldArmyBrent said:

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We can disagree, but the theory on the Hill is that this stuff has been out there for months, so there's no problem making it retroactive like that. There is no constitutional problem with it being retro, it's just the political problem. This is seen as something that makes the rich pay their fair share.

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All I'm saying is that if you contribute to a backdoor Roth in January, then they will need to pass new legislation to allow it to be recharacterized back (if my understanding is correct, the recharacterization went away in 2017).

The CBO has released a new cost score of $3T added to the deficit for BBB assuming the measures are extended during the 10 yr window of scoring. As it stands, some will sunset over the course of 10 yrs which allows the Dems to use the lower cost figure.

However, the Democrats are on record saying the point of this legislation is to get it in place as a first step and get the populace hooked to the new programs. Thus, extension will be demanded when the time comes to do that.

No reason not to use the $3T cost number considering the Dems intent. Hopefully, it at least gets massively gutted, but I won't hold out much hope for that.

Is this Senate vote happening today?

Brian Earl Spilner said:

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Is this Senate vote happening today?

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No, it's not expected to go to a vote this week

I just got a summary update from my FA on the latest tax changes in BBB, specifically the Senate text. There are no differences between the House text and Senate text at this point other than the SALT deduction.

The house text temporarily raises it to $80K. The senate version is listed as TBD; it's been left empty so it can be amended later. Everything else is the same and all of the provisions previously dropped are still dropped. The Billionaires tax is currently dropped and still being debated.

Schumer is wanting to vote on the Senate text by end of year, but Democrats are now bracing for it to slide into 2022.

Well I just dropped my after-tax contributions to my 401k, since I'm assuming this will be retroactive to Jan 2022.

Thanks a lot Biden.

Brian Earl Spilner said:

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Well I just dropped my after-tax contributions to my 401k, since I'm assuming this will be retroactive to Jan 2022.

Thanks a lot Biden.

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Are you doing this because of Biden's 401k reform idea?

If so, that never made it into BBB in the first place.

It was dropped but later readded. (After-tax contributions will no longer be allowed to be converted to a Roth, aka the mega backdoor Roth contribution, for all income levels)

Brian Earl Spilner said:

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It was dropped but later readded. (After-tax contributions will no longer be allowed to be converted to a Roth, aka the mega backdoor Roth contribution, for all income levels)

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I was thinking about his overall idea to make them tax credits which wouldn't have even mattered here.

Now I'm not sure if I should be keep doing after-tax contributions or not in case it passes and I end up owing taxes on them anyway.

Go ahead and do a 2021 contribution (and backdoor to Roth) if you haven't already. Roth conversions must be dated no later the 12/31. Hold off on after tax contributions for 2022 until we get a better feel for legislative moves in 2022. Dems will likely try to amend and resubmit some kind of spending bill here after the 1st of the year.

I'm not sure why I'm saying this because these are Democrats we are talking about but you would assume any retroactive action would be in the current year that the bill passes and not reach back to closed years.

well, I know the IRS opens up the filing system typically at the end of Jan. They are really screwed trying to implement changes if they go much past the end of the year. Especially now with a COVID depleted workforce. Doesn't mean it won't happen, but what a Charlie Foxtrot that would be.

He won't vote for the bill at all. It's completely dead

I hope the Dems aren't able to get a new one off the ground either

Hm.. so safe to keep doing mega backdoor roth contributions in 2022 in y'alls opinion?

Brian Earl Spilner said:

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Hm.. so safe to keep doing mega backdoor roth contributions in 2022 in y'alls opinion?

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Yes, although you may want to front load after-tax first just in case a new bill comes back up