In the July 22, 2024 Slott Report, my colleague Sarah Brenner explained how the IRS, in its final SECURE Act required minimum distribution (RMD) regulations issued on July 18, did not budge on a controversial position it had taken in its 2022 proposed regulations.
On July 18, 2024, the IRS issued final required minimum distribution (RMD) regulations under the 2020 SECURE Act. The newly issued regulations fine-tune existing rules for trust beneficiaries and aggregation of RMDs. They also eliminate burdensome rules for certain spouse beneficiaries and documentation requirements for certain IRA beneficiaries.
Question:One of our clients wants to cash out his IRA and then roll it into a Roth IRA within 60 days. Can this be done directly, or does it have to be rolled back into an IRA first and then converted?
When an IRA owner does a Roth conversion, there is typically a 5-year clock for the earnings on the converted dollars to be tax free. If a person already had a Roth IRA for 5 years AND is over 59 ½, there is no conversion clock to worry about. For these people, Roth IRA distributions will be both tax- and penalty-free.
One of the more interesting rules (if any could be called “interesting”) from the 2022 IRS proposed regulations requires spouse beneficiaries in some situations to take RMDs (required minimum distributions) before doing a spousal rollover.
QUESTION:Do required minimum distributions (RMDs) need to be taken when a non-spouse beneficiary inherits Roth IRA? It seems this has been a point of confusion for some time.
If you are charitably inclined and have an IRA, a Qualified Charitable Distribution (QCD) can be a great strategy. With a QCD, you can move IRA funds to the charity of your choice tax-free. Here are 12 QCD rules you must know.
If I pour too much water into a glass, removing liquid from a different glass does not correct the problem. The excess water must be removed from the “offending” receptacle. Such is the case with excess IRA contributions.
If you take a taxable withdrawal from your IRA or 401(k) (or other company plan) before age 59 ½, you normally have to pay a 10% penalty in addition to taxes. But Congress continues to carve out exceptions to this penalty, and there are now 20 available. In Notice 2044-55, the IRS recently gave us guidance on the new SECURE 2.0 penalty exceptions for withdrawals from IRAs and workplace plans to pay emergency expenses and for victims of domestic abuse.
More and more Americans have retirement savings in Roth 401(k)s. With their rising popularity come some complicated tax issues. These funds are often rolled over to Roth IRAs at retirement or when a participant changes job.
