As we move into 2022, small business owners may be wondering whether they still have time to establish a new retirement plan for 2021. The short answer is: “It depends.”
There are several retirement plan options especially designed for small business owners, including the self-employed. These include SEP IRAs, SIMPLE IRAs and Solo 401(k)s. All three can be opened up and maintained easily and inexpensively, and all allow tax-deductible contributions that can be significantly higher than the IRA contribution limit.
Question:
Has the IRS clarified the 10-year rule on inherited IRAs? Do you have to take RMDs each year or can you wait until the 10th year? Also, does this rule apply to inherited Roth IRAs?
Thanks,
Daniel
Welcome to 2022!
One of the big changes in the retirement account world this year will be the calculation of required minimum distributions (RMDs). RMDs for IRA owners and plan participants are calculated using life expectancies from IRS tables. There are three tables:
1. The Uniform Lifetime Table, used to calculate lifetime RMDs in most cases.
Question:
I have a client, age 65, who passed away and left her IRA to her estate. Two nephews and a niece are beneficiaries of the estate. Is there a way to add beneficiaries after her passing?
I spoke with a financial company, and they said you need some type of court order or ruling to allow this.
During 2021, Congress has taken up a number of different retirement proposals, and it’s been difficult to keep track of them. Here’s an update of how things stand at the moment. Of course, new developments could occur at any time, so stay tuned.
Many sections of the tax code are confusing, but section 457(b) is one of the major offenders. Within that section are the rules for two different types of company retirement plans -- governmental plans, and “top hat” plans for management employees of tax-exempt employers like hospitals.
Are you considering opening up a new solo 401(k) and looking to maximize your 2021 contribution? If so, you may need to act quickly. There is a December 31, 2021 deadline for establishing a new plan if you want to make 2021 elective deferrals.
The September 29, 2021 Slott Report summarized the rules for taking non-hardship withdrawals from 401(k) plans. This article will focus on the hardship withdrawal rules.
Question:
Hello,
I have a question about the calculation for RMDs when they were missed for multiple years. Is the RMD calculated on the actual balance or the balance it would have been if the RMDs had been taken?
Thank you,
As discussed in the October 18 Slott Report, spousal beneficiaries of IRAs can take advantage of certain payout rules that aren’t available to non-spouse beneficiaries.
For example, a surviving spouse who remains a beneficiary can defer required minimum distributions (RMDs) until the year her deceased spouse would have turned age 72. Also, when RMDs begin for surviving spouse beneficiaries, the spouse can go back to the IRS Single Life Expectancy (SLE) Table each year to recalculate her life expectancy factor.
