Pub. 2 2012-2013 Issue 5

8 O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S FEATURE ARTICLE “Financial organizations that administer ESAs and IRAs will want to have a good understanding of these latest legislative changes, not only to ensure compliance, but to better serve their clients.” Saved By the “Fiscal Cliff” Bell A s most Americans were ringing in the New Year, the Senate was holding an early morning roll call vote on a bill to avoid hurtling off of the “fiscal cliff” that would have resulted from the expiration of the Bush- era tax rates and spending cutsmandated by the Budget Control Act of 2011. The compromise bill passed the Senate and the House on New Year’s Day, pulling us back from the brink, and saving us from falling off the fiscal cliff. Subsequently, on January 2, 2013, Presi- dent Obama signed into law the American Taxpayer Relief Act of 2012 (ATRA), making permanent most of the Bush-era tax rates, postponing for two months the automatic across-the-board spending cuts mandated by the Budget Control Act of 2011, and extend- ing a host of other expiring individual and business tax provisions. The bill contains something for everyone, including those who are saving through retirement and education savings plans. Even financial organizations offering IRAs and Coverdell education sav- ings accounts (ESAs) will benefit from two provisions of the bill. EGTRRA Coverdell ESA Provisions Made Permanent ATRAmakes permanent the Coverdell ESA provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) that were set to expire on December 31, 2012. As a result, there are no changes to ESAs and the accounts will operate permanently under the rules that were in place for 2012. DENNIS ZUEHLKE Compliance Manager Ascensus Q Fiscal Cliff  continued on page 10