What is the new ROTH 401(k)?
A. Starting January 1, 2006, employers will be allowed to offer a new 401(k) that acts like a ROTH IRA. Contributions will be made on an after-tax basis. No tax deduction will be taken in the current year but the entire distribution will be tax free upon withdrawal. Which plan will generate more after-tax dollars will depend on whether your tax rate rises or falls in your retirement years. The major difference will be the minimum distribution requirements of a traditional IRA at age 70 1/2. The new plan acts as a major breakthrough that puts ROTH 401 (k)’s on a similar footing as ROTH IRA’s have with traditional IRA’s. An analysis should be done to detemine which is best for you. Q. Can I take a tax deduction for donating my vehicle? A. Yes. You can take a deduction on Schedule A for the amount the charity receives on the sale of the vehicle. The charity must supply you with Form 1098-C within 30 days after the date of sale. You, in turn, must attach this form to your individual income
