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|Subject: Re: Cancellaton of Tax-free Roth Withdrawals??||Date: 12/1/2010 7:27 PM|
|Author: BruceCM||Number: 67771 of 83149|
I believe the "second half" that a self-employed person pays is deductible from federal income tax, though.
Yes, for those self-employed or partners of a partnership, 1/2 of SE tax is deductible on their personal 1040s above the line.
But to the OP's question: Congress can pass any law or repeal/ammend any existing law they wish, providing it does not violate the fundamental principals of the Constitution. For example, there are currently legal suits challanging the new Health law's requirement that all individuals must have health insurance by a certain date.
But it is highly unlikely that the promises of non-taxable Roth earnings upon a qualified withdrawal will be resended for Roth accumulated earnings. Not sure if such a law making accululated earnings ordinary income upon withdrawal could be challanged as unconstitutional, but from a practical standpoint, can you imagine the negative politics at reelection time for those legislators who voted to retroactively resend the Roth's tax free character? Whew!
However, indirect taxation is certainly in the cards, and I expect some forms of this to wiggle into our tax returns. For example, requiring the calculation for determining provisional income used in determining how much of one's Social Security is includable as ordinary income, may well be ammended to include the earnings portion of a qualified Roth withdrawal.
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