Reform Bill Intensifies Savings Focus

There is currently a limit of $100,000 in adjusted gross income for Roth IRAs. But don't forget, as we reported back in May, starting in 2010, the $100,000 rollover ceiling will also disappear. Then anyone can convert money to a Roth IRA.

Among the other miscellany are changes to the treatment of retirement plans upon a person's death. In the past, when a person died, his retirement plan could only be rolled into his surviving spouse's plan to avoid tax implications. Now this special treatment is extended to nonspouse beneficiaries, which is a big perk for same-sex couples.

Charity Check-Ups

Aside from these retirement changes, Congress tightened the tax rules surrounding donations to charities.

Now, every single cash contribution needs some sort of documented receipt. Whether it's your bank statement or a note from the charity, you now need something in case of an audit.

In addition, if you're donating clothing or household goods, like furniture or appliances, they better be in "good condition" or the donation will be disallowed, says George Jones senior tax analyst at CCH. Of course, there's no real definition of "good condition" in the new bill, so use your best judgment.

And finally, if you're 70-and-a-half or older, you can donate up to $100,000 from your IRA to charity for tax years 2006 and 2007. But don't think you can withdraw the money, hand the charity a big check and be a part of a big philanthropic photo op. Your IRA trustee has to send the money directly, or you'll owe tax.

There are plenty of other new directives for corporations and their pension plans that we can delve into, but these are the rules most likely to affect your hard-earned savings. Get used to the changes; President Bush has said he plans to sign the pension protection act into law, so the moves likely are here to stay.