Bob Dylan’s tax planning could be tangled up in … green?
It ain’t no lie. Bob Dylan has sold his immense collection of songs. The financial details were not disclosed, but most commentators estimate the deal is worth hundreds of millions of dollars. While...
View ArticleJanuary is the new December for charitable contributions
Required minimum distributions from retirement accounts resume in 2021 after being waived for 2020. By acting early in the year, advisers can help clients reduce their RMD tax bill with qualified...
View ArticleWhat clients won’t see on this year’s 1099-R form
As you read this in early February, your clients are receiving their annual 1099-R forms that report distributions taken in 2020 from their IRAs and other retirement accounts. Once they look the forms...
View ArticleQuirks in required minimum distributions this year
The combined effect of several recent changes to tax laws have complicated 2021 required minimum distributions. The changes — the CARES Act waiver of required minimum distributions for 2020, the...
View ArticleIRS: SECURE Act’s 10-year RMD rule is not what you thought
See Ed Slott’s April 28 update to this article here. In late March, IRS released IRS Publication 590-B, which contains the tax rules on withdrawing funds from individual retirement accounts. Normally...
View ArticleWeighing in on disputed language in IRS 10-year RMD rule
Here’s an update to my earlier article on IRS’s interpretation of how the SECURE Act 10-year rule will work for beneficiaries of individual retirement accounts. I am now 100% convinced that the idea...
View ArticleThe Triple Crown tax benefits of 2021 Roth conversions
On the eve of this year’s Kentucky Derby, the first of three races a horse must win to grab racing’s Triple Crown, the Biden tax proposals are underscoring the triple crown of tax advantages provided...
View ArticleCongress, stop the madness and eliminate RMDs
Congress has come up with what some are calling SECURE 2.0, or Son of SECURE — a bill entitled Securing a Stronger Retirement Act that includes many positive changes to encourage retirement savings....
View ArticleAnother IRS update on the 10-year rule
This is my third update on the confusion about the 10-year rule on required minimum distributions under the SECURE Act, and it won’t be the last. Last Thursday, the IRS acknowledged that IRS...
View ArticleIRS clarifies the 10-year rule, but with added confusion
Here we go again. The 10-year-rule saga continues, and it is still not over. The issue involves the 10-year rule that most non-spouse designated beneficiaries (like adult children or grandchildren,...
View ArticleIRS says RMD rules are coming ‘soon’
When it comes to the rules about required minimum distributions from individual retirement accounts and other retirement plans, the SECURE Act begs not only for clarification, but more like a complete...
View ArticleMidyear checkup on required minimum distributions
Any IRA owner turning age 72 this year will have a required minimum distribution due for 2021, but the due date for taking that RMD will depend on the half of the year in which they were born. June 30...
View ArticleTime’s running out for a mega qualified charitable distribution!
Most people no longer receive tax benefits for their charitable gifts because they take the standard deduction and do not itemize their deductions. The qualified charitable distribution is a tax...
View ArticleIRA trustees wipe out an inherited IRA — their own
Imagine spending a lifetime building a retirement account only to have your beneficiaries lose it in one fell swoop: They mishandle the account, triggering tax on the entire inherited individual...
View ArticleCourt rules inherited 401(k) funds are protected in bankruptcy
ERISA is the creditor protection gold standard for company retirement plans. But what happens when those plans are inherited? Does the ERISA protection carry over to beneficiaries? One court says...
View ArticleCongress is going after the largest IRAs
Congress has set its sights on mega-IRA balances, in large part due to the recent reports about Peter Thiel’s $5 billion Roth IRA. But some of these proposals will impact many other clients with...
View ArticleTilt odds in clients’ favor to win year-end Roth conversion bet
As we’ve seen from recent tax proposals, Congress has retirement accounts in its sights for future tax increases, especially the larger IRAs. We know what the tax rules and tax rates are for 2021, but...
View Article5 ways to add value with year-end tax planning conversations
A recent article in The Wall Street Journal, “The Problem With How Many Financial Advisers Set Their Fees,” advised readers (likely your clients) to ask these questions when it comes to the fees you...
View ArticleEarly planning on qualified charitable distributions can mean bigger tax savings
Timing is everything and that goes for qualified charitable distributions as well. That’s why QCD planning should be addressed early in the year to maximize the tax savings on required minimum...
View ArticleConfusion about 2022 required minimum distributions
You don’t have to be a Jeopardy champion to know how to calculate required minimum distributions for 2022, but it may be equally challenging due to several recent tax rule changes. First, the Secure...
View ArticleThe new IRS 10-year RMD rule isn’t what we thought it was
On Feb. 23, the IRS released its long-awaited SECURE Act proposed regulations for required minimum distributions, which include some big changes to the way most of us thought these payout rules would...
View ArticleYour RMD questions answered
The IRS’ proposed regulations on required minimum distributions released on Feb. 23 created a flood of questions from advisers on how the post-death RMD rules would work. The IRS’s interpretation of...
View ArticleStretch IRAs still exist for some beneficiaries
The so called “stretch IRA” allows designated beneficiaries to extend required minimum distributions and the tax deferral over their life expectancy based on their age in the year after death....
View ArticleUpdate estate plans for IRAs with these 3 steps
The SECURE Act, combined with recent IRS RMD rules, has upended the estate plans many clients have made for individual retirement accounts they will be leaving to their beneficiaries. Most non-spouse...
View ArticleConfusion about RMDs on inherited IRAs
Before the SECURE Act, there was the stretch IRA, which was relatively simple for advisers and clients to calculate for beneficiaries. But now, after the SECURE Act and the recent plot twists added by...
View ArticleTaking RMDs in the form of stock
Once again, clients are worried about taking required minimum distributions while the markets are in turmoil. This happened in 2008-2009 and again in 2020. In response to the 2008 market crash,...
View ArticleThe IRS answers a crucial penalty question for missed RMDs
The Internal Revenue Service issued Notice 2022-53 on Oct. 7, 2022, providing RMD relief by waiving the excise tax (the 50% RMD penalty) for missed 2021 and 2022 inherited retirement account required...
View ArticleWhich beneficiaries are subject to RMDs by year-end?
Year-end means required minimum distribution season, since that’s typically when clients take RMDs. But year-end is also when lots of costly RMD mistakes happen — costly because of the 50% penalty on...
View ArticleGiving funds in IRAs to charity with QCDs
Funds held in individual retirement accounts are without question the best assets to give to charity. Since IRAs are loaded with taxes, why not help clients relieve that tax burden by using the IRA...
View ArticleRMD quirks that IRA beneficiaries face in ’23
The calculation of required minimum distributions for beneficiaries has always been uniquely complicated because of confusing tax rules that differ depending on the type of beneficiary, when they...
View ArticleSECURE 2.0 provides breathing room for RMDs
The SECURE 2.0 Act of 2022, enacted Dec. 29, includes almost 100 new retirement plan provisions, many of which aren’t effective yet. But some big changes involving required minimum distributions and...
View ArticleWant to do a 529-to-Roth rollover? Read the fine print
Hands down, the SECURE 2.0 Act provision allowing tax-free rollovers from 529 plans to Roth IRAs is the No. 1 item financial advisors are asking about. In every program since SECURE 2.0 passed, this...
View ArticleIncorrect RMD notices may result in distributions that aren’t exactly ‘required’
The IRS released IRS Notice 2023-23 on March 7 to provide relief to financial institutions that may have sent out incorrect required minimum distribution notices to IRA owners stating that the owners...
View ArticleNonfungible tokens held in IRAs can trigger big tax hit
Nonfungible tokens, or NFTs, may trigger unexpected taxes and penalties if they’re held in an individual retirement account, the IRS said in a notice issued in March. IRA funds can be invested in...
View ArticleNavigating ever-changing tax rules on IRAs
It’s no exaggeration to say that every time you turn around lately, there’s a new tax law or piece of IRS guidance that changes the tax and distribution rules for IRAs. Based on questions we’re...
View ArticleIRS provides limited RMD relief
Once again, due to ongoing confusion about required minimum distributions, the IRS has found it necessary to give limited relief to both IRA owners and beneficiaries. The relief was contained in...
View ArticleStop contributing to IRAs and 401(k)s
Stop contributing to your IRAs and 401(k)s? That has to be a typographical error. After all, traditional retirement planning has always preached maximizing contributions to tax-deferred individual...
View ArticleIRS delays mandatory Roth catch-up provision until 2026
IRS released Notice 2023-62 on Friday giving employer retirement plans two additional years to comply with the controversial rule requiring that catch-up contributions for employees age 50 or over...
View ArticleConverting IRA to Roth is a financial gift
The Roth IRA is the ultimate financial gift for retirees and their beneficiaries. Roth individual retirement accounts have no lifetime required minimum distributions, so you’ll never have to worry...
View ArticleHow to unravel complicated 2023 RMD rules
As the last quarter of 2023 begins, clients will likely be asking advisors whether they’re subject to required minimum distributions. That used to be an easy question to answer both for individual...
View ArticleYear-end QCD mistakes to avoid
Assets in individual retirement accounts are the best assets to give to charity, since they’re loaded with taxes. For those who give regardless, using IRAs to make the gifts can provide tax benefits —...
View ArticleHoliday gift tax planning for IRAs
Individual retirement accounts cannot be gifted during the owner’s lifetime. Once funds are withdrawn from an IRA, they are generally taxable. But funds outside of IRAs can be used to beef up...
View ArticlePlanning for the largest IRA balances ever in 2024
The stock market reached all-time highs in 2023, with year-end balances in individual retirement accounts and 401(k)s hitting the highest ever for many. That’s great news, of course, but it also opens...
View ArticleHigh stock values and layoffs combine for big tax breaks on company stock
As stock values continue to rise to record levels, unfortunately so do layoffs. In 2023, more than 260,000 tech employees were let go, according to layoffs.fyi, a site that tracks job cuts. That...
View ArticleAn unexpected double tax break for 529-to-Roth rollovers
One of the most talked-about provisions of the SECURE 2.0 Act is the one allowing a limited amount of unused funds in 529 accounts to be rolled over to Roth individual retirement accounts. This change...
View ArticleJames Caan estate case highlights rollover rules advisors need to know
The jokes began as soon as the court decision came out: “The Godfather made the IRS an offer it could refuse.” “Sonny Corleone shot down again.” “Estate of James Caan whacked in tax case.” Yet it’s...
View ArticleOnce again, IRS waives RMDs for beneficiaries subject to the 10-year rule
Here we go again. For the fourth year in a row, the IRS has provided relief on required minimum distributions for beneficiaries of individual retirement accounts who are subject to the SECURE Act’s...
View ArticleDelaying RMDs may be a costly tax strategy
No pain, no gain. That’s true in most things, since we often don’t like to pay up front for anything that could be put off until a later time. Unfortunately, that can also be true for paying taxes on...
View ArticleSECURE 2.0 penalty protections may not be as good as thought
The penalty for missing a required minimum distribution (RMD) is one of the largest in the Tax Code. For years it was 50 percent of the amount that should have been taken but was not. That penalty was...
View ArticleBest advice? Ignore the 10-year RMD rule
The IRS has released almost 300 pages of regulations on required minimum distributions (RMDs) for IRAs and 401(k)s, in two parts. The first part was the FINAL Secure Act Regulations-7-18-24.pdf which...
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