An advisor called to discuss Roth IRA conversions. His new client made some decisions before speaking with him, and he was trying to untangle her self-inflicted knot. She was 69 years old, a single tax filer, still employed, and had a $1 million traditional IRA. Based on advice from her brother (who is not a financial professional), she had already ripped through Roth conversions of $200,000 for both 2021 and 2022. The brother’s only consideration in making his recommendation was, “The market is down.”
Question:I am 75 years old and contributing to my company’s 401(K) plan. I have not taken an RMD from my 401(K) utilizing the “still-working exception.” I just retired on April 30, 2022. My question is: Do I have to take an RMD from my 401(K) for the current year 2022, or am I allowed to wait until next April 2023 to commence taking the first RMD from the 401(K) plan?John
On February 23, 2022, the IRS released the long-awaited proposed SECURE Act regulations. The new regulations clock in at 275 pages and offer guidance on many SECURE Act rules. They also include a few surprises. Here are some highlights.
Question:For COVID "special" Aug 31 rollovers, am I allowed to return my 401(k) required minimum distribution (RMD) to my IRA?Thank you,MariaAnswer:Hi Maria,Yes, the CARES Act and subsequent IRS guidance allows unwanted
Question:If someone took two IRA distributions earlier in 2020 that were considered RMDs, and now wishes to repay the cumulative amount back into the same IRA, are there any rules about the number of rollover deposits they can make in order to do so? Must it be done in 1 transaction, or 2, or could it be spread out across even more?Thank you,AdamAnswer:Adam,With IRS Notice 2020-51, released on June 21, the one-rollover-per-year rule and the 60-day rollover rule can both be bypassed for RMD payments that are returned by August 31, 2020.
The IRS has extended the rollover deadline for required minimum distributions (RMDs) taken from IRAs or company plans in 2020. In Notice 2020-51, released on June 23, the IRS said that any unwanted 2020 RMDs can be repaid via rollover to an IRA or company plan by August 31, 2020.Normally, RMDs cannot be rolled over. However, the CARES Act waived 2020 RMDs (and first-time 2019 RMDs delayed until 2020) from IRAs and defined contribution plans. For this reason, amounts received in 2020 that would have been RMDs are eligible for rollover since they are technically not RMDs.
Question:I understand that I don’t have to take any RMDs during 2020. However, is the CARES Act rule that it is an-all-or-nothing for RMDs or can I take a portion of my RMD for 2020 but not allJohnAnswer:Hi John,Since RMDs are waived this year, you have complete flexibility. In 2020 you can take none of what would have been your RMD, some of it, all of it, or even an amount greater than what would have been your RMD amount.
This week's Slott Report Mailbag answers readers' questions about QCDs and RMDs.
This week's Slott Report Mailbag answers readers' questions about conversions, missed RMDs, and inherited IRAs.
This week's Q&A Mailbag answers reader questions on excess IRA contributions and RMDs for inherited IRAs.
