Any financial expert will tell you it s best to keep your retirement savings tucked away until, well, retirement. That certainly holds true for one of the most common ways to save for those post-career years: employer-sponsored 401(k) plans.
But life can get in the way of the best investment plans. And if you have an immediate need for cash, borrowing from your 401(k) may make the most financial sense. Especially when you compare that option to other loan alternatives or withdrawing money entirely from the plan.
However, there are many rules, both from the IRS and individual employer plans, that apply to 401(k) loans. If those are not followed, you may end up paying taxes and penalties that can seriously hamper your finances.
Corporate Minimum Tax
Biden would introduce a new 15% minimum tax on book income of companies that report net income of more than $100 million. Corporations would pay the higher of the regular corporate income tax or the 15% minimum tax. The minimum tax would still permit corporate taxpayers to use foreign tax credits and any net operating loss carryovers.
Changes to GILTI
Biden would double the current effective tax rate on “global intangible low-taxed income” (“GILTI”) from 10.5% to 21% (and from 13.125% to 26.250% starting in 2026).
In addition, Biden would calculate GILTI tax liability on a country-by-country basis, rather than a global basis, and thereby deny taxpayers the ability to blend high-taxed foreign income with low-taxed foreign income. Under current law, the GILTI tax exempts earnings up to a 10% deemed return on “qualified business asset investment.” Biden would eliminate the exemption.
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