Many people want to leave the substantial wealth they have accumulated in retirement accounts in trust for their beneficiaries, rather than having the retirement accounts pass outright to them. However, the IRS has established extremely complicated rules governing when retirement plan, IRA and Section 403(b) annuity contracts payable to a trust can be distributed over the life expectancy of one of the trust beneficiaries, rather than under the general five year distribution time limit.
Archive for Retirement
19
Apr 2018
IRS Approves Extended Retirement Plan Distributions To A Trust
No comments
| Tags: IRS, Kentucky, Louisville, mark sommer, Retirement Plan Tax, Tax Advisor, Tax Blog, TaxConnections, Trust, Trust Tax, USA
16
Mar 2018
IRS Reminds Retirees Of April 1, 2018 Deadline To Take Required Retirement Plan Distributions
WASHINGTON — The Internal Revenue Service today reminded taxpayers who turned age 70½ during 2017 that, in most cases, they must start receiving required minimum distributions (RMDs) from Individual Retirement Accounts (IRAs) and workplace retirement plans by Sunday, April 1, 2018.
The April 1 deadline applies to all employer-sponsored retirement plans, including profit-sharing plans, 401(k) plans, 403(b) plans and 457(b) plans. The RMD rules also apply to traditional IRAs and IRA-based plans such as SEPs, SARSEPs, and SIMPLE IRAs, however, they do not apply to ROTH IRAs. Read more
13
Mar 2018
Retirement Plan Contributions In 2018: An Elderly Parent Might Qualify As Your Dependent
The clock is ticking down to the tax filing deadline. The good news is that you still may be able to save on your impending 2017 tax bill by making contributions to certain retirement plans.
For example, if you qualify, you can make a deductible contribution to a traditional IRA right up until the April 17, 2018, filing date and still benefit from the resulting tax savings on your 2017 return. You also have until April 17 to make a contribution to a Roth IRA.
And if you happen to be a small business owner, you can set up and contribute to a Simplified Employee Pension (SEP) plan up until the due date for your company’s tax return, including extensions. Read more
15
Nov 2017
Senate Finance Committee Reduction in Retirement Savings of Public Education and Government Employees
I have been focused this past week on understanding the impact and implementation of the House Ways & Means and Senate Finance Committee proposals on U.S. businesses foreign source income. Two proposals that interest me are the ones aimed at transfer pricing, being (1) the minimum deemed distribution of a foreign subsidiary’s earnings above a statutorily defined return on tangible capital and (2) the 20% excise tax on payment to foreign related corporations.
09
Nov 2017
IRS Policy Needs to Reflect the Reality of Retirement for Today’s Taxpayers
Unlike private creditors, the IRS has wide discretion to exercise its administrative levy powers. Internal Revenue Code (IRC) § 6331(a) says the IRS can generally “levy upon all property and rights to property.” The IRS must make notice and demand for payment and in most instances provide collection due process (CDP) rights prior to levy. And under IRC § 6334, the IRS is prohibited from levying on certain sources of payments, such as unemployment benefits and child support. But overall, the IRS can cast a large net when it chooses to levy a taxpayer’s property, including funds in retirement accounts.
Read more
13
Oct 2017
Disaster Victims Can Take Hardship Distributions From Retirement Plans
The IRS has announced relief for victims of recent disasters. If you live in a federally-declared disaster area, you qualify for this program. As an affected taxpayer, you may take a loan or hardship distribution from your retirement plan.
Streamlined procedures have been put in place to allow taxpayers quick access to funds in these accounts. The plan must allow for hardship withdrawals. However, these distributions may be made prior to the plan being amended to allow such withdrawals. Contact the human resources department at your company to see if your plan allows these loans or distributions. The IRS is waiving the six-month ban on distributions that normally affects taxpayers taking hardship distributions. Any distribution or loan under this announcement must be made by January 31, 2018.
10
Oct 2017
Getting Ready For Retirement: It’s More Than Just Money!
Many of our clients talk to us about setting up retirement plans, contributing to retirement plans, and focusing on the monetary aspects of retirement. But what they don’t do is spend a lot of time thinking about and planning for the nonfinancial aspects of their retirement; they don’t realize it’s the biggest transition they’ll ever go through.
The consequences of not planning can include sitting around with growing boredom. Retirees watch TV an average of 43.5 hours a week, according to Age Wave 2012, and lack of stimulation can be associated with higher risks of alcoholism or depression. Read more
26
Sep 2017
Rollover Of Retirement Plans Self Certification For More Time
Normally you have 60 days to rollover retirement plan distributions in order to avoid current taxation and possible penalty. If you have special circumstances challenging your ability to complete the rollover within this 60-day time frame, please be advised that there are several circumstances in which the IRS has repeatedly given taxpayers additional time to complete the rollovers.
In an attempt to help taxpayers avoid costs and time, the IRS released Revenue Procedure 2016-47. This ‘Rev Proc’ in tax geek speak has a self-certification statement which should be completed and given to the financial institution receiving the rollover. Be sure to keep a copy of the statement in question along with the Rev Proc in case audited. Read more
06
Sep 2017
Rollover Of Retirement Plans Self Certification For More Time
Normally you have 60 days to rollover retirement plan distributions in order to avoid current taxation and possible penalty. If you have special circumstances challenging your ability to complete the rollover within this 60-day time frame, please be advised that there are several circumstances in which the IRS has repeatedly given taxpayers additional time to complete the rollovers. Read more
27
Aug 2016
Waiver of 60 Day Roll Over Period for Distributions from Tax Deferred Retirement Plans
This article explains the “self-certification” waiver of the 60 day roll over requirement based on the provisions of the recently released Rev. Proc. 2016-47. The IRS required certification foe a waiver is also included.
10
Feb 2016
Ideas for Retirement Savings Reform
On 1/28/16, the Senate Finance Committee held a hearing on – Helping Americans Prepare for Retirement: Increasing Access, Participation and Coverage in Retirement Savings Plans. This isn’t the first time for this topic. There were a few hearings on this in 2014. I’m not sure if anything is driving the renewed attention to this topic now. While tax reform is challenging in an election year, this important topic seems good for any year. There is a need for reform of the tax rules for retirement plans to make them more equitable and simple to help more people save for retirement. Read more
No comments
| Tags: Annette Nellen, equity, ideas, reform, Retirement, Retirement Plan, savings, savings reform
02
Feb 2016
Retirement Plan Options For Small Businesses
According to the US Small Business Administration, small businesses employ half of all private sector employees in the United States. However, a majority of small businesses do not offer their workers retirement savings benefits.
If you’re like many other small business owners in the United States, you may be considering the various retirement plan options available for your company. Employer-sponsored retirement plans have become a key component for retirement savings. They are also an increasingly important tool for attracting and retaining the high-quality employees you need to compete in today’s competitive environment. Read more
-
Current Articles
The Tax Implications of DeFi: A General OverviewDeFi, or decentralized finance, has experienced unprecedented growth over the last few years, resulting in a market cap of approximately $85 billion as of October 2021. Built on blockchain […]
Introduction Of Bill To Protect Taxpayer Rights And PrivacyTax Gap Reform And IRS Enforcement Act Provides Guardrails Around Proposed IRS Funding Washington, D.C.–Seeking to protect taxpayers against Democrats’ campaign to monitor Americans’ bank […]
How To Report Gambling Winnings And Losses To The IRSAfter a big win on a lotto ticket or after a great night at the casino, the last thing you’re probably thinking about are those pesky tax obligations that come along with it. While that brand new […]
TaxConnections Virtual Tax Summit – Tax Professionals AND Business Owners Invited To November 12, 2021 EventIn a world of rapid change, engaging with and learning from other professionals is key to the success of every business organization. Having a support team of trusted professionals provides valuable […]
Biden Administration Overriding Tax Treaties. Does This Mean Existing Treaties Are Worthless?https://twitter.com/andygr/status/1444980907354513410 (The above tweet was a response to a recent article in the Financial Post.) Introduction This post is a comment on yesterday’s Tax […]
%d bloggers like this: