Tax Time Financial Capability Working Group October 28, 2015

Transcription

1 Tax Time Financial Capability Working Group October 28, 2015 *All attendees are unmuted, so please mute yourselves when you re not speaking for sound quality.

2 Agenda 12:00-12:10 ET Welcome & Roll Call 12:10-12:50 ET myra Discussion 12:50-1 ET Wrap-Up One thing you re excited about for the 2016 season! U.S. Department of Treasury, Office of Consumer Policy will join us to discuss: o o o o o o Updates since we last spoke in July Quick review of myra and enrollment process Key things for VITA sites to know Types of materials that will be made available for VITA groups Considerations for the Saver s Credit Q&A Ideas for the Next Call Scheduling of next Call

3 Introductions Your Name Your Organization One thing you re excited about for 2016

4 myra (my Retirement Account) An Easy Way to Help Tax Filers Save October 28, 2015

5 Why get involved with myra? You can help tax filers: Start saving and building assets for retirement with myra Get on the path to a more secure retirement by turning their tax refund into savings Take advantage of the Saver s Tax Credit (if eligible) 5

6 How can you help tax filers? Help tax filers get on the path to a more secure retirement by encouraging them to open a myra contribute all or part of their tax refund to a myra account take advantage of the Saver s Tax Credit with their retirement savings contributions (if eligible) 6

7 Today s agenda Retirement savings challenges Introduction to myra myra at tax time Get involved with myra this tax season 7

8 Millions are not saving for their future Many don t have access to a retirement savings plan at work a major barrier to saving. Other barriers include: Cost and fees of opening and maintaining a retirement account Difficulty making choices among savings options Concerns about losing money Need to access funds for unexpected expenses or emergencies 8

9 Now there is a new way to save myra is a new retirement savings account developed by the U.S. Department of the Treasury to help people start saving It is designed for people who don t have access to a retirement savings plan at work or lack other options to save It is a Roth IRA that invests in a new U.S. Treasury retirement savings bond Savers can open an account, build up savings to $15,000, then transfer or roll over their savings to a private-sector Roth IRA to take advantage of other opportunities to invest and grow their savings* *Savings in a myra account will earn interest until the account balance reaches $15,000 or 30 years from the day of the first contribution to the account (whichever comes first). The account balance will then be transferred to a private-sector Roth IRA, where savers can continue to invest and make additional contributions. Savers can transfer or roll over their myra to a private-sector Roth IRA of their choice at any time. 9

10 Saving with myra is Savers can set up automatic contributions If changing jobs, the account stays with the saver Savers can withdraw money they put in (contributions) without tax and penalty 1 No risk of losing money The investment is backed by the U.S. Treasury The account safely earns interest 1 No cost to open and no fees Savers contribute an amount they choose ($2, $20, $200 whatever fits their budget!) 2 Savers can enjoy the tax advantages this type of investment brings 2 1 Interest earned can be withdrawn without tax and penalty five years after your first contribution if you are over age 59 1/2 or meet certain other conditions, such as using the funds for the purchase of your first home. Accounts earn interest at the same rate as investments in the Government Securities Fund, which had an average annual return of 3.19% over the ten-year period ending December Annual and lifetime contribution limits and annual earned income limits apply, as do conditions for tax-free withdrawal of earnings. Limits listed are for 2015 and may be adjusted annually for cost-of-living increases. To learn about key features of a Roth IRA and for other requirements and details, go to myra.gov/roth-ira. 10

11 Opening a myra account is easy People can open a myra account in a matter of minutes at myra.gov or by calling The following information is needed to open an account: Social Security number* Driver s license, state ID, U.S. passport, or military ID Name and birth date of at least one beneficiary (the person you choose to inherit the account) * You can also open an account using an ITIN (Individual Tax Identification Number), but only by contacting myra customer support at or TTY/TDD or International

12 Here s how you can help tax filers get started Tell tax filers about saving with myra and the opportunity to put away all or part of their tax refund in a safe interestbearing account Encourage them to open a myra account and make a contribution to that account with their tax refund Make sure they claim the Saver s Tax Credit for the amount deposited (based on eligibility and amount rules) for the relevant tax year 1 * Tax filers who elect to have a contribution that is deposited in a particular calendar year treated as a contribution for the prior tax year must contact myra customer support to make this request (contributions must also be deposited by the relevant IRA contribution deadline). 12

13 Help clients take advantage of the Saver s Tax Credit myra is a Roth IRA, and along with other tax advantages, it allows eligible tax filers to claim the Saver s Tax Credit while also saving for retirement Savers may qualify for the Savers Tax Credit if they Have a modified adjusted gross income (AGI) below: $61,000 for married couples filing jointly, $45,700 for heads of household, and $30,500 for singles and married individuals filing separately Are age 18 or older, not a full-time student, and are not claimed as a dependent on another tax return The amount of the credit can be 50 percent, 20 percent, or 10 percent of retirement contributions up to $2,000 ($2,000 per spouse if married filing jointly) depending on AGI and filing status 13

14 Ways to get involved with myra Encourage tax filers to open myra accounts send s to your clients encouraging them to open a myra account as a step in preparing to file their taxes. Educate staff and volunteers about myra train staff and volunteers on myra and on ways they can encourage clients to save by opening a myra account. Talk to tax filers about myra educate tax filers on myra and how saving for retirement could also help them save on their taxes. Urge tax filers to keep saving with myra encourage myra account holders to continue saving by setting up automatic contributions from their paycheck 14

15 Resources in Development An overview on Tax Preparation and myra A myra guide for tax preparers Flyer Poster myra at-a-glance Web banners Video about myra 15

16 Next Steps What would you like us to discuss on the next call? When should we schedule the next call?

17 Thank You