Investing

It’s never too early to start planning for the upcoming tax season by getting organized.
Before filing, it’s important to know 2023 changes that could affect your tax liability.
“You really need to be your own advocate,” said certified financial planner Edward Jastrem, chief planning officer at Heritage Financial Services.

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1. Tax brackets got wider

When comparing tax year 2022 to 2023, there was a big adjustment to the federal income tax brackets, according to experts.
While the rates didn’t change, there was roughly a 7% increase in the brackets, which expanded the amount of taxable income you can have in each tier. You calculate taxable income by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

“That was a larger increase than usual,” Kyle Pomerleau, senior fellow and federal tax expert with the American Enterprise Institute, previously told CNBC. “And that is because inflation has been higher than usual.”

2. There’s a bigger standard deduction

Inflation also boosted the standard deduction for 2023, which reduces your taxable income, but makes it harder to claim itemized tax breaks for charitable giving or medical expenses.
For 2023, the standard deduction increased to $27,700 for married couples filing jointly, up from $25,900 in 2022. Single filers may claim $13,850 for 2023, an increase from $12,950.
Enacted via the Tax Cuts and Jobs Act of 2017, the higher standard deduction is slated to sunset in 2026, along with lower tax rates. Some filers may have tax planning opportunities in the meantime, such as accelerating income or making Roth individual retirement account conversions, said CFP Nicholas Gertsema, CEO and wealth advisor at Gertsema Wealth Advisors in St. Joseph, Missouri.

3. Form 1099-K reporting changes are delayed

The IRS in November delayed a 2023 reporting change for business payments made via apps such as PayPal or Venmo.
Prior to the change, even a single payment of $600 would have triggered Form 1099-K, which reports business payments to the IRS.

Referring to 2023 as a “transition year,” the IRS said 2023 would have the old limit of more than 200 transactions worth an aggregate above $20,000.
However, business income is still taxable, warned Tommy Lucas, an Orlando, Florida-based CFP and enrolled agent at Moisand Fitzgerald Tamayo. “If you want to follow the law, you [have] still got to report it, even if a third party is not.”

4. Energy tax credits are in play

If you purchased a vehicle in 2023 or made energy improvements to your home, you could qualify for tax breaks, according to the IRS.
The clean vehicle tax credit caps the break at $7,500, while eligible eco-friendly home improvements could be worth thousands more.
With more complicated tax breaks, it’s critical to “have your ducks in a row” prior to meeting with a tax preparer, Jastrem said.Don’t miss these stories from CNBC PRO: More

Retirement savers in their 40s should have between three to six times their salary set aside, according to one guideline from Fidelity.
But workers who have not yet met those thresholds should not be discouraged.
“It’s never too late to start, never too late to start saving,” one expert says.

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If you’re in your 40s, you probably have seen articles on how much you should have saved by now to comfortably retire.
One guideline from Fidelity Investments calls for having three times your starting salary saved by 40, with the aim of growing that to six times by age 50.

If you’re not confident with the progress you’ve made to date, the good news is there’s still time to get on track.
“If you’re in your early 40s, you could have 20, 25, possibly 30 years to save,” said Mike Shamrell, vice president of workplace thought leadership at Fidelity.
“It’s never too late to start, never too late to start saving,” he said.

Savers in their 40s show ‘encouraging behavior’

Savers between the ages of 40 and 49 have an average savings rate of 9.1% of their annual salary. With average employer contributions of 4.9% for that cohort, the total savings rate is around 14%.
“We encourage people to aim for a 15% savings rate,” Shamrell said. “So that fact that people in their 40s are at 14% is an encouraging behavior.”

Today, 401(k)s and other workplace savings plans are typically the main retirement savings vehicle.
However, the 40-something age cohort may have had access to pensions early in their career, Shamrell noted. Moreover, they may have other investment accounts, which means Fidelity’s 401(k) data may not fully capture how much workers in their 40s have saved.
Other research has found the retirement outlook for people in their 40s, who mostly belong to Generation X, is not necessarily rosy. The typical Gen X household has just $40,000 saved toward retirement, according to the National Institute on Retirement Security. Having student loan debt was one factor likely to deter their progress, the research found.
Fidelity’s savers in their 40s had an average balance of $105,000 at the end of the third quarter.

More from Your Money:

Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.

Why a long-term approach pays off

Notably, those in their 40s who had been in their plan for 10 years straight — in the same plan, with the same employer — had a higher average balance of $286,300 at the end of the third quarter.
Fidelity regularly tracks the share of its 401(k) participants who reach millionaire status with their accounts.
Most of those accounts do not belong to 30- or 40-year-olds, according to Shamrell, a testament to the long-term dedication it takes to reach retirement savings success.
People in their 40s should keep in mind those savings levels don’t happen overnight, according to Shamrell.
“If you continue to take a long-term approach and consistently save, the hope is that you will gradually see your savings levels increase,” he said.
Money invested can compound, where the earnings generate interest and continue to grow.

When it’s time for a wake-up call

“For those who haven’t really started saving, this is a real fork in the road,” said Winnie Sun, managing director of Irvine, California-based Sun Group Wealth Partners.
Without action now, those investors may have to either make major financial sacrifices or reduce their standard of living when they do retire.
“Most likely, it will be a bit of both,” said Sun, who is a member of the CNBC Financial Advisor Council.
Sun recently met with a client in her early 40s with just $50,000 saved for retirement, well short of the goal of having three to four times her $150,000 annual income in a tax-sheltered retirement account.
Sun advised the client and her husband, who had no retirement savings, to pare back their “spend what they earn” mentality.

By taking out extraneous costs, such as a dozen streaming services subscriptions and annual credit card fees, the couple has found $2,000 a month to devote to retirement savings.
Their budget overhaul also includes getting rid of a third car that is unnecessary for their household, finding ways to earn additional income through side gigs or freelance work and possibly even renting out a room in their home.
Coming up with such a plan to get on track with retirement may be difficult without the help of an experienced financial advisor, Sun said.
“When you’re in your 40s and your important financial goals like retirement are approaching sooner, you don’t have as many years to make mistakes,” Sun said.
Factors that can derail retirement savings include credit card debt, oversized mortgages, lack of savings for children’s college and not having plans for health or long-term care in place, according to Sun.

Tips to get your retirement savings on track

1. Maximize your 401(k) or other retirement plan contributions.
In 2024, the maximum individuals can put in their 401(k), 403(b), most 457 plans or the federal Thrift Savings plan will be $23,000, up from $22,500 this year.
Those who are 50 and older will be able to put an additional $7,500 in those accounts next year.
IRA savings limits will also go up to $7,000 from a cap of $6,500 this year. People ages 50 and older will be able to put an additional $1,000 in those accounts.
2. Pay down high-interest debts.
Carrying debt balances with high interest rates is one of the biggest mistakes Sun said she often sees from investors in their 40s.
As the Federal Reserve has hiked interest rates this year, those balances have become more expensive.
Experts recommend getting rid of those debts as soon as possible, which can be helped with a 0% balance transfer credit card or by working with a nonprofit credit counselor to come up with a plan.
3. Set up an emergency savings account.
Hardship withdrawals, where a retirement plan participant takes money out of their account, have increased as people continue to face cost-of-living pressures, according to Fidelity.
“People are struggling,” Shamrell said.
Unexpected financial emergencies tend to prompt those early withdrawals.
Having emergency savings may serve as a buffer that helps retirement savers keep their money in their 401(k)s or other retirement plans.
Experts typically recommend having at least three months’ expenses set aside, if possible. More

UBS expects to complete its takeover of Credit Suisse “as early as June 12”, which will create a giant Swiss bank with a balance sheet of $1.6 trillion.
Fabrice Coffrini | Afp | Getty Images

Company: UBS Group AG (UBS)

Business: UBS Group AG is a Switzerland-based holding company. It conducts its operations through UBS AG and its subsidiaries. The company operates as a wealth manager with focused asset management and investment banking capabilities. UBS is made up of four business divisions: global wealth management, personal and corporate banking, asset management, and investment banking.
Stock Market Value: $106.9B ($30.89 per share)

Stock chart icon

UBS shares YTD performance

Activist: Cevian Capital

Percentage Ownership:  1.3%
Average Cost: n/a
Activist Commentary: Cevian Capital is an international investment firm acquiring significant ownership positions in publicly listed European companies, where long-term value can be enhanced through active ownership. Cevian Capital is a long-term, hands-on owner of European listed companies. It is often called a “constructive activist” and is the largest and most experienced dedicated activist investor in Europe. The firm was founded in 2002. Cevian’s strategy is to help its companies become better and more competitive over the long run, and to earn its return through an increase in the real long-term value of the companies. Its work at companies is typically supported by other owners and stakeholders.

What’s happening

On Dec. 19, Cevian Capital announced that it had built a roughly $1.3 billion stake in UBS Group AG.

Behind the scenes

Cevian is a true pioneer in international activist investing, having been doing it for more than 20 years. The firm is considered the gold standard for activism in Europe. Cevian often takes large positions and has a very long-term investment horizon. The firm will be an active shareholder but will also take board seats in many of its core portfolio positions. Currently, Cevian’s professionals serve on the boards of 10 portfolio companies in six different countries.

UBS is the largest global wealth manager with unique market positions and financial strength, yet it is viewed and priced by many as an ordinary bank. The largest part of its business is wealth and asset management, which makes up 60% of its global revenue. It is one of the largest wealth managers in the United States, but it is by far the largest wealth management firm in the world, with three times the assets of the No. 2 firm. Moreover, 55% of its wealth management business is outside of the Americas. Twenty percent of UBS’s revenue comes from Swiss retail and corporate banks, where the company is the No. 1 player. Another 20% of its revenue comes from investment banking. But unlike many of its peers, investment banking at UBS is primarily used to support wealth and asset management. It is not a risk-taking business. Accordingly, only 25% of UBS’s tangible equity is from investment banking, versus 70% for Morgan Stanley. To put it another way, Morgan Stanley is a bank with a wealth management business whereas UBS is a wealth manager with a banking business. You would expect the steady, predictable, lower-risk revenue of a wealth manager to trade at a higher multiple than a banking business. Yet, UBS trades at 1.2 times tangible book value, whereas Morgan Stanley trades at two times tangible book value.
In general, banks are trading at very attractive valuations right now in Europe – at a 50% discount to the market. UBS is an extremely undervalued but high-quality business with significant improvement potential. First, since the merger with Credit Suisse, the bank is in the middle of a restructuring, which is not appealing to short-term investors, but an opportunity for long-term investors like Cevian. Second, UBS’s performance could be improved: The company is getting a 14% return on tangible equity, versus 20% for Morgan Stanley. Getting Credit Suisse integrated and optimizing performance creates a very compelling investment for long-term investors. Cevian thinks this could lead to UBS shares trading at $58 versus $30.89 today.
This is a large position for Cevian: $1.3 billion, almost 10% of the $14 billion it manages. Based on the firm’s philosophy and history, Cevian has likely been building this position for several months, constructively engaging with management during that time. The firm has not indicated that it’s looking for a board seat at the moment, which means that it’s not searching for one right now. However, Cevian is not the type of activist that asks for a board seat just for the sake of it. If Cevian is not asking for a board seat, it means that the firm is aligned with management right now and is having constructive talks with them on matters like profit potential. Cevian will continue to talk with management. If at some point in the future, the firm thinks that it can add value from a board level, it will discuss board composition with the company at that time. At ABB Group, the activist firm had an investment for about two years before Cevian founder Lars Forberg went on the board. More than six years later, he is still on the board. If Cevian takes a board seat at UBS in the future, the activist investor will bring with it the experience and successful track record it’s had in other banking companies, such as its current position in Nordea Bank.
Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments.  More

Last-minute holiday shoppers could get more than they bargained for amid heightened fraud risks.
Experts say taking five steps before you buy can help protect you from falling prey to schemes.

Betsie Van der Meer | Getty

If you’re a last-minute holiday shopper still checking off the remaining gifts on your list, beware: You could be putting yourself at risk for fraud.
“Procrastination is, quite frankly, one of the keys to success for crooks,” Paul Fabara, chief risk officer at Visa, recently told CNBC.

“They assume that you’re going to fall for that last-minute offer that guarantees delivery of the product within 24 hours, or even the same day, at a discounted price,” Fabara said.
If you become victim to one of these schemes, not only will you not get what you ordered, but you may also receive transactions on your account that you never personally authorized.
To avoid that, Visa has flagged some best practices for secure shopping this season.

1. Avoid shopping on public Wi-Fi

Since public Wi-Fi networks are not secured, your personal information may be more likely to be stolen.

2. Use secure websites

Be sure to check that a website address starts with “https://” to ensure your data is encrypted and your connection is secure.

3. Do a background check on web retailers

4. Take extra steps to protect your accounts

Be sure to use unique and strong passwords for bank accounts, credit cards and online accounts with retailers. Also implement two-factor authentication that requires you to use more than just a password to verify your identify.

5. Beware of deals that sound too good to be true

If a website has an otherwise sold-out item at a great price and expedited shipping, think before you buy. That too-good-to-be true offer may not be real.
Unsuspecting consumers are prone to getting duped when it comes to the hot toy or item of the season, noted Melanie McGovern, spokeswoman for the International Association of Better Business Bureaus.
If a social media ad pops up showing the item available for an inexpensive price when it’s sold out everywhere else, be wary, she said.
If you do find you’ve fallen prey to a scam, the best first step is to contact your bank, credit card company or other financial institution to let them know your information has been compromised, according to Fabara.Don’t miss these stories from CNBC PRO: More

In February 2022, the IRS suspended automated collection notices to devote resources to its backlog.
But starting next month, notices will resume and the IRS will send a “special reminder letter” to taxpayers with unpaid balances.
If you receive a notice, experts say it’s critical to take action and pay your balance or set up a payment plan.

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How IRS collection notices work

Typically, CP14 is the first IRS notice for an unpaid tax balance, followed by three or four reminder letters, every five weeks, explained Darren Guillot, national director at Alliantgroup, who previously served as IRS deputy commissioner of the agency’s small business division.
It’s possible many taxpayers only received that first letter before the IRS paused automated collection notices, he said. 
However, the agency is waving roughly $1 billion in late-payment penalties for millions of taxpayers with balances under $100,000 from returns filed in 2020 and 2021. The relief is automatic, but late-payment penalties for unpaid balances from 2020 and 2021 will resume April 1, 2024.

How to respond to IRS letter: ‘You can’t bury your head’ 

While late-payment penalty relief may be welcome news for taxpayers with debt from 2020 or 2021, you still need to pay off those balances.    
“You can’t bury your head and pretend it’ll go away,” Guillot said, emphasizing the importance of responding to collection notices promptly to avoid further enforcement actions.  
“The vast majority of taxpayers can set up a payment plan for themselves” by scanning a QR code on their IRS notice, he said.  

The vast majority of taxpayers can set up a payment plan for themselves.

Darren Guillot
National director at Alliantgroup

If you owe $50,000 or less, including tax, penalties and interest, you can set up a long-term payment plan online. You can also set up a short-term payment plan, 180 days or less, online for less than $100,000 in combined tax, penalties and interest.
“The online installment payment application is just fantastic,” said Phyllis Jo Kubey, a New York-based enrolled agent and immediate past president of the New York State Society of Enrolled Agents. “I use that online installment agreement all the time for my clients.”
If you choose the monthly payment option and select a very small amount, such as $2, for example, the system will default to the minimum monthly payment it will accept for your balance, she said. 
Kubey typically urges clients to contract for the minimum monthly payment and then pay extra if they can afford it. “It’s super convenient,” she added.

Don’t miss these stories from CNBC PRO: More

Some colleges offer and market financial products to students that can be exploitatively pricey, a new CFPB report finds.
Here’s what to look out for.

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Some colleges offer and push financial products to students that can be exploitatively pricey, a new report by the Consumer Financial Protection Bureau finds.
“This analysis indicates that hundreds of colleges are paid by financial institutions to market certain products to students,” the bureau writes. “This can lead to students paying more for financial products than they would on the open market.”

Between 2021 and 2022, financial institutions generated over $17.3 million in revenue from more than 650,000 student bank accounts, the CFPB says. These banks may hit students with overdraft fees as high as $36, among other charges, even as many other financial institutions have ended such practices. Account holders at historically Black colleges and universities, or HBCUs, and Hispanic-servicing institutions paid especially high fees, on average.
Meanwhile, credit card issuers paid colleges and affiliated organizations over $19.6 million in 2022, with more than 140 partnerships between schools (and their associations) and credit card issuers.
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Lawmakers have tried to curb the marketing of financial products at colleges. In 2008, Congress passed the Higher Education Opportunity Act, which established some protections for students against unfair and deceptive private educational lending. The Credit Card Accountability Responsibility and Disclosure Act, or CARD Act, of 2009, reined in aggressive advertising of credit cards on campus.
Despite such legislation, “many colleges continue to offer and market financial products in ways, including through online and email advertisements, that may mislead students under certain circumstances,” according to the CFPB.

“Reading this report, I was disappointed to see that some of these practices are apparently still going on,” said Betsy Mayotte, president of The Institute of Student Loan Advisors, a nonprofit.
Here’s what students should know, consumer advocates say.

Students can pick where financial aid ‘refunds’ go

Students typically receive a “refund” or “credit balance” of their financial aid after their school has applied their funding to tuition and fees. “Disbursement of credit balances are vital to students,” the CFPB says, and help students cover essentials “including food [and] housing.”
Institutions often contract with banks to offer deposit accounts with these funds, according to the bureau.
In other cases, colleges partner with financial institutions to offer bank accounts or prepaid cards, separate from financial aid disbursement. Many schools allow students to use their ID cards as debit or prepaid cards, if they participate with the partnered bank.

“When students choose to use their IDs for financial services, they may be required to open a new account with a specific financial institution,” the CFPB writes. And in some instances, misleading marketing can make it seem like a student must use their ID cards to access their remaining financial aid.
Don’t fall for it, said higher education expert Mark Kantrowitz.
“Students have a right to have their financial aid refund deposited to a bank account of their choosing,” he said. “They do not have to have it deposited to the debit card or bank account picked by the college.”
Students should spend some time shopping around and looking for an account with the least fees, Kantrowitz added. Some online banks offer free checking accounts and free withdrawals from any ATM.
When you’ve found a good option, colleges usually have a form where you can provide the bank routing and account number of your choosing.

Credit cards should be mostly avoided

Although credit card companies have scaled back their marketing on college campuses, problems persist, the CFPB found. “College students continue to rely on credit cards to help cover costs,” it says.

In general, students should avoid carrying a balance on a credit card, experts say.
While undergraduate federal student loans disbursed last summer had an interest rate of 5.5%, the average interest rate on credit cards is more than 20% of late.
Even if your college appears to be recommending a card, you should be wary, said Elaine Rubin, director of corporate communications at Edvisors. “Credit cards can be high risk,” Rubin said.
Young people looking to build their credit may want to explore secured credit card options, she added. These typically require a security deposit and have smaller credit limits than unsecured cards. More

ETF Strategist

Assuming the U.S. Securities and Exchange Commission approves spot bitcoin ETFs, more companies might decide to offer it within their 401(k) lineup.
Retirement savers who believe in the long-term potential of the cryptocurrency will have more access to crypto as an asset class, either through their company 401(k) plan or through solo 401(k)s, if applicable, and self-directed IRAs.
Bitcoin is up over 150% year to date, but it is extremely volatile, and many investors don’t have the risk appetite to invest even a portion of their retirement dollars in this emerging asset class.

Paul Yeung | Bloomberg | Getty Images

Retirement savers who want a taste of bitcoin without owning the cryptocurrency coins directly could soon gain the access they’ve been craving.
The Jan. 10 deadline is nearing for U.S. regulators to decide whether to allow a spot bitcoin exchange-traded fund, which would attempt to track the real-time price of bitcoin, and industry participants are feeling hopeful the U.S. Securities and Exchange Commission will give it a thumbs-up.

It remains to be seen how popular such an ETF would be with retail investors, but more than 10 asset managers, including the world’s largest, BlackRock, are working to get their version of a spot bitcoin ETF approved. Industry participants predict that after these offerings become available, it won’t just be high-risk traders, but also retirement savers who will have more access to crypto as an asset class, either through their company 401(k) plan or through solo 401(k)s, if applicable, and self-directed IRAs.
“It’s a big step toward mainstream adoption of bitcoin and cryptocurrency. [Investors] will have more options available,” said Chris Kline, chief revenue officer of Bitcoin IRA, which allows retirement savers to invest in more than 60 cryptocurrencies within retirement accounts. 

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Here’s a look at other stories offering insight on ETFs for investors.

Right now, interest in bitcoin is high. The cryptocurrency is up over 150% this year after a dismal 2022, and the spot bitcoin ETF race has helped push its value higher. But it remains an extremely volatile asset class with as many enemies as true believers.
Many major pension funds have earmarked dollars to crypto as an asset class in recent years. According to the 2022 CFA Institute Investor Trust Study, 94% of state and local pension plans had some crypto exposure. Fidelity Investments, the largest 401(k) plan administrator in the U.S., first added a bitcoin fund option in the fall of 2022 to allow employees who are comfortable with the risks and volatility of cryptocurrency to invest in bitcoin within their company-sponsored 401(k) plan.
Here’s what retirement savers who do see long-term potential in cryptocurrency as an asset class need to know about the potential use cases for spot bitcoin ETFs.

Options to own crypto in retirement accounts are limited

Many employers have been hesitant to offer crypto in a 401(k) based on 2022 guidance from the U.S. Department of Labor, according to industry experts.
With options to own crypto within retirement accounts such as 401(k)s and IRAs being limited, most people who own crypto today do so outside of retirement accounts. Many take a self-custody approach or use an exchange such as Coinbase or Gemini. Options are also available in nonretirement accounts at Fidelity and Betterment, for example.
Accordingly, retirement savers seeking to hold crypto assets in a retirement account typically need to find a self-directed provider that allows crypto investments, and that list is also limited. Once spot bitcoin ETFs are approved, however, expect more providers to allow them, and more options for retirement savers to invest in this fashion, say industry experts. 

If SEC approves over Department of Labor concerns, what happens next

Assuming the SEC gives an affirmative nod to spot bitcoin ETFs, as expected, more companies might decide to offer it within their 401(k) lineup, said Steven T. Larsen, a certified financial planner and founder of Columbia Advisory Partners in Spokane, Washington.
The question is how many.
The Department of Labor doesn’t prohibit crypto in company retirement plans, but in its March 2022 guidance, “it put a pretty heavy thumb on the scale for plan sponsors considering it,” said Joshua Rubin, vice president of legal at Betterment. 
“At this early stage in the history of cryptocurrencies, the Department has serious concerns about the prudence of a fiduciary’s decision to expose a 401(k) plan’s participants to direct investments in cryptocurrencies, or other products whose value is tied to cryptocurrencies,” the Department of Labor wrote in a compliance assistance release. 

A spot bitcoin ETF may solve some of the hesitancies the DOL outlined, including concerns related to custody and recordkeeping and valuation, Rubin said. Still, employers may be hesitant to jump on board, at least initially, some industry watchers said.
“Employers will be very reticent about being the first ones out there to allow this,” said Tim Picciott, a CFP with Lexington, Massachusetts-based Innovative Advisory Group. “I don’t see most HR departments and plan trustees just signing on. I think it’s going to have to be a move from the workers” asking for it, he said. 

Spot bitcoin ETFs likely to ‘be everywhere’

While market-leading custodians such as Schwab and Fidelity don’t allow investors to invest directly in cryptocurrencies within individual retirement accounts, they have become more involved in the crypto market on multiple fronts, from venture investments both financial services giants made in a crypto trading infrastructure company to a thematic crypto fund launched by Schwab.
But to invest directly, retirement investors need to work with other providers such as Bitcoin IRA, BitIRA and iTrustCapital.
However, market watchers predict more mainstream custodians will offer spot bitcoin ETFs once they become available. “It will be everywhere once these come out,” said Larsen, who is also the founder of Defi Steward, which helps investment advisors manage digital assets for clients. “This is great for people who want exposure to bitcoin as an asset class,” he said.

Tax advantages for long-term crypto investors

There are a lot of factors that go into whether bitcoin has a place in your retirement portfolio. First and foremost, bitcoin is extremely volatile and many investors don’t have the risk appetite to invest even a portion of their retirement dollars in this emerging asset class. Investors also need to consider whether they want to hold bitcoin directly in a self-directed IRA, or solo 401(k), if applicable, or invest in bitcoin through an ETF. 
With a spot bitcoin ETF, having a professional manager who is going to be diversifying access to crypto could lessen — though not eliminate — risk, said Mark Parthemer, chief wealth strategist at Glenmede, a wealth management firm.

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On the other hand, there can be advantages to owning bitcoin directly through a self-directed IRA, Kline said. For instance, when it comes time to take your withdrawals after age 59½, you may be able to receive your distribution as the crypto asset itself, instead of taking the cash. When you sell the spot bitcoin ETF, the redemption would likely be for cash, he said. It’s an approach the SEC regards as safer.
In either case, there can be tax advantages for long-term investors who invest in crypto through a retirement account versus a brokerage account, Parthemer said. Assuming the investment increases dramatically, a retirement account allows investors to avoid the tax at the time of sale. If it’s in a Roth IRA and you meet the holdings requirements, the withdrawals aren’t subject to tax. By contrast, if you held it in a regular brokerage account and sold it, you could be subject to capital gains taxes at the time of sale, Parthemer said.

Options if your employer won’t offer a spot bitcoin ETF

If your employer won’t offer a spot bitcoin ETF in its 401(k) plan, you could always ask your employer to reconsider. If the answer is no, you can still open an IRA with a provider that makes spot bitcoin ETFs available.
The new spot bitcoin ETFs will be eligible for use in all types of IRA accounts — deductible, nondeductible, Roth and SEP, as well as solo 401(k) plans, said Ric Edelman, founder of Edelman Financial Services, in an email.

“Given the outsized returns that many people expect these ETFs to produce over time, buying them inside an IRA account is going to be a common recommendation by financial advisors,” said Edelman, who wrote the 2022 book, “The Truth About Crypto” to educate advisors on the asset class and has described it as a once-in-a-generation wealth opportunity.
There are applications for an Ether ETF, but that’s likely to be approved by the SEC at a later point, Larsen said. “The spot bitcoin ETF will be the test case.” More

The IRS has unveiled a “voluntary disclosure program” for businesses that claimed a pandemic-era tax credit in error and want to pay the money back.
The new voluntary disclosure program offers the chance to repay credits received at a 20% discount to cover third-party promoter fees.  
The deadline to apply to the voluntary disclosure program is March 22, 2024.

IRS Commissioner Daniel Werfel testifies before the House Small Business Committee on July 17, 2013.
James Lawler Duggan | Reuters

The IRS has unveiled a “voluntary disclosure program” for businesses that claimed a pandemic-era tax credit in error and want to pay the money back.
Worth thousands per employee, the employee retention tax credit, or ERC, was designed to support small businesses affected by the Covid-19 pandemic. The lucrative tax break sparked a cottage industry of firms pushing employers to wrongly claim the credit. 

The IRS unveiled a “special withdrawal process” for companies with pending claims in September. The new voluntary disclosure program offers applicants the chance to repay credits received at a 20% discount to cover third-party promoter fees.  
However, it’s a “limited-time offer,” IRS Commissioner Danny Werfel said during a press call Thursday. The deadline to apply to the voluntary disclosure program is March 22, 2024.
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“We urge employee retention credit recipients who think they were misled by promoters to review these special programs, including either the disclosure program or the withdrawal option, depending on their situation,” Werfel said.
The new program comes roughly two weeks after the IRS announced it’s sending more than 20,000 ERC rejection letters to taxpayers as part of its crackdown on “dubious” filings. 

Werfel said the IRS is sending another round of letters to companies that wrongly received the ERC and those taxpayers will not be eligible for the voluntary disclosure program.
“It’s for those that have received the claim, or received their credit, and have not yet heard from the IRS,” he said.
To qualify for the program, companies must provide the IRS with contact information for any advisors or tax preparers who assisted them with the erroneous claim, along with details about the services.  

Companies can apply for the program by filing Form 15435, which can be submitted through the IRS’ document upload tool.
Participants won’t owe interest or penalties if they repay 80% of the credit upon signing the closing agreement. However, interest and penalties will apply for repayment via installment agreements.Don’t miss these stories from CNBC PRO: More