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As sure as the sun will rise, someone will take a distribution from his IRA tomorrow. And as sure as the moon will set, someone will fail to roll over his IRA distribution within 60 days. And as sure as the wind will blow, so too will the icy gusts from the IRS as penalties and taxes accumulate like a snowdrift upon said distribution when the 60-day rollover deadline is missed.Yes, a person is permitted to take a distribution from his IRA and roll it over to another (or the same) IRA within 60-days. But only one rollover is allowed within a 12-month period. That means no rollovers for the next 365 days.

Some of you may have received an RMD (required minimum distribution) from an IRA or employer plan earlier this year that you don’t want to keep. Since the CARES Act waived RMDs for 2020, “RMDs” received in 2020 are technically not RMDs and are eligible for rollover.The IRS has relaxed the usual 60-day rollover rule if an RMD is repaid by August 31. (The IRS also waived the once-per-year rollover rule for an IRA RMD that is repaid back to the same IRA before August 31.) With just a few days to go, you may not be able to time to meet the August 31 deadline. But all may not be lost.

The upcoming school year for many students is going to look like nothing we have ever seen before. For many, computers and related technology will become an indispensable part of academic life. This means that having reliable equipment and internet access is more important than ever. For many families this is just another unexpected expense in a pandemic economy. Here is how an ESA could help.

Dollar cost averaging is a tried-and-true investment strategy that has existed for decades. Using this technique, an investor divides up their entire amount to be invested and makes smaller periodic purchases over a desired time. The goal of dollar cost averaging is to minimize the potential volatility of a single large investment. Essentially, dollar cost averaging seeks to reduce the possibility of making a big purchase just before the value drops.Example: Roger has $10,000 and wants to invest in a mutual fund. Roger is unsure what the market’s direction will be over the next few months. To avoid the possibility of investing the full $10,000 all at once and then having the market immediately drop, Roger elects to dollar cost average.

Many of you may have already received, or may be receiving, an RMD (required minimum distribution) from your employer plan this year. If the CARES Act waived 2020 RMDs from plans and IRAs this year, how could a company plan be making RMD payments? The answer is a little complicated.Under the tax code, plans are allowed to force participants to receive a distribution without their consent at a certain age. For most plans, that is age 65. The CARES Act did not change that rule. So, plans are legally permitted to pay out RMDs at age 70 ½ or later – even in 2020. Plans may be continuing to pay RMDs to avoid modifying their procedures for processing distributions just for this year.

Question:Client has a Thrift Savings Plan and took RMDs in January, February and March of 2020. Client then rolled the balance of the TSP into an IRA. Question is whether or not he can “repay” those RMDs to the IRA under Notice 2020-51. Thanks.Answer:Yes, the three RMD payments can be “repaid” to the IRA, but a deadline is fast approaching. Plan-to-IRA rollovers do not count against the one-rollover-per-year rule, so that is not a concern. However, since these RMD payments were taken back in January, February and March, they are outside of the standard 60-day rollover window.

We are in the dog days of summer and this year is a crazy and unsettling time. The last thing on your mind may be your IRA. However, you should be aware that an important deadline is quickly approaching. If you took your 2020 required minimum distribution (RMD) from your IRA and now want to repay it, your time may be running out. The deadline for these three repayment remedies is August 31.1. Repay more than one RMD distribution. Normally, you are limited to rolling over only one IRA distribution in a one-year period. If you take multiple distributions during this period, you are typically out of luck. However, these are not normal times! In Notice 2020-51, the IRS waives the one-per-year rule for 2020 RMDs. This is good news if you took your RMD in multiple distributions, which many people do.

Yes, trusts can play an instrumental role in estate planning. Yes, special needs trusts are invaluable to those with disabled or chronically ill family members. Trusts are essential for minors and for those who may struggle with managing money. Trusts also allow for post-death control of assets. But they are not for everyone, nor are they a panacea when it comes to estate planning…especially with IRAs.I continue to pound my head on the desk every time I encounter a trust unnecessarily named as an IRA beneficiary. Why did the IRA account owner name the trust? Bad advice? Was he simply trying to keep up with the Jones’ who bragged about their trust? Did he read someplace that all trusts are great? Was he intentionally trying to make things difficult for his IRA beneficiaries? Sadly, “making things difficult” is oftentimes the unintended result.

Hidden within the Setting Every Community Up for Retirement Enhancement Act (SECURE Act) signed into law last December is a provision giving businesses extra time to establish certain new tax-qualified retirement plans.Prior to the SECURE Act, a new workplace plan had to be adopted by the last day of the employer’s tax year. Despite that deadline for adopting a new plan, businesses were always allowed extra time to make retroactive employer contributions for any year (including the plan’s first year). The employer contribution deadline is the due date (including extensions) of the company’s federal tax return.

Last year the SECURE Act became law and eliminated the stretch IRA for millions of IRA beneficiaries. However, for some IRA beneficiaries the stretch lives on.For most beneficiaries, the stretch is now replaced with a ten-year payout period. Beginning for deaths in 2020, the ten-year rule will apply to designated beneficiaries who are not eligible designated beneficiaries under the SECURE Act. Eligible designated beneficiaries include spouses, minor children of the IRA owner, chronically ill and disabled individuals and beneficiaries who are not more than ten years younger than the IRA owner.