Core Points - The appeal of retirement accounts like 401(k)s and traditional IRAs lies in the tax breaks received from contributions, which reduce taxable income in the contribution year [1] - The IRS mandates required minimum distributions (RMDs) starting at age 73 to ensure tax revenue is collected upon withdrawals [2][6] RMD Calculation - RMDs are calculated based on the account balance at the end of the previous year and a life expectancy factor (LEF) corresponding to the account holder's age [7] - An example shows RMDs for ages 73 to 80 based on a $500,000 account balance, with amounts ranging from $18,868 at age 73 to $24,752 at age 80 [5][8] Penalties for Missed RMDs - A 25% penalty applies to any missed RMD amount, with a potential reduction to 10% if the mistake is corrected within two years [9] - Staying compliant with RMD requirements is crucial to avoid penalties and retain more funds during retirement [10]

Core Points - The U.S. Treasury Department has released a preliminary list of 68 occupations eligible for a tax deduction on tips as part of the One Big Beautiful Bill Act, which will take effect on or before December 31, 2024 [1][5] - The list includes a wide range of occupations beyond traditional service roles, such as podcasters, social media influencers, and house painters, indicating an expansion of the tipping culture in the U.S. [1][2][5] - The new tax break on tips is retroactive for eligible income earned in 2025, allowing workers to deduct up to $25,000 in tips per return, which can significantly reduce taxable income [13][14] Group 1: Eligible Occupations - The preliminary list includes various roles such as pastry chefs, food preparation workers, bartenders, tow truck drivers, tattoo artists, and yoga instructors, highlighting the broadening scope of who qualifies for the tax deduction [2][5][9] - Notably, some occupations traditionally associated with tips, like lawyers, are excluded from the list, as they do not receive tips as part of their payment [6][9] Group 2: Tax Deduction Details - The deduction applies only to voluntary tips, meaning mandatory service charges, such as those automatically added to restaurant bills, are not eligible for the tax break [10][11][12] - Taxpayers must report all tips to their employers if they total $20 or more in a single month, and employers are still required to withhold taxes for Social Security and Medicare [15][16] - The deduction phases out for higher-income earners, with specific thresholds set at $150,000 for single filers and $300,000 for married couples filing jointly, completely phasing out at $400,000 and $550,000, respectively [16]