Traditional Individual Retirement Accounts, better known as IRAs, were created by the Employee Retirement Income Security Act of 1974 (ERISA) and have revolutionized how Americans save for their golden years. They became available on January 1, 1975.

Although IRAs are meant to provide individuals with a source of income during retirement, many clients may want to incorporate their IRAs into their overall estate planning. In such cases, while making clear that you are not providing tax or legal advice, you may find yourself  discussing IRA beneficiary options with clients. Beneficiary options—especially for Roth IRAs—can be confusing.

The financial organization holding the IRA as of December 31 of the prior year must provide an RMD statement to the IRA owner by January 31 of the year for which the distribution is required.

IRS final required minimum distribution (RMD) regulations were published on July 19, 2024, more than four years after enactment of relevant statutory changes in the SECURE Act of 2019. Especially noteworthy are provisions affecting those who inherit an IRA whose owner had not yet satisfied the RMD for the year in which they died. Ironically, these provisions have the potential to both simplify and to complicate the process by which beneficiaries meet year-of-death RMD obligations.

A provision allowing high deductible health plans (HDHPs) to waive the deductible for telehealth and other remote care services without causing plan participants to lose the ability to contribute to a health savings account (HSA) expires for calendar year plans on December 31, 2024. 

Financial organizations are responsible for paying out HSA assets to beneficiaries after an HSA owner’s death and properly reporting these distributions to the IRS, so your role as an HSA administrator is important. And because HSA beneficiary options differ from IRA and employer plan beneficiary options, it’s a good idea to familiarize yourself with the options and distribution process.

It is not turning age 65 that makes people ineligible to contribute to HSAs, but rather enrollment in Medicare that prevents HSA owners from making further contributions. And while most people do enroll in Medicare when they turn 65, it is not necessarily required.

You may have noticed an increase in clients making late IRA transactions because they live or work in a federally declared disaster zone. This disaster relief can affect your financial organization and how you report certain IRA transactions.

To assist Ascensus clients during the busy contribution and tax season, the 800 Consulting telephone lines will be open for extended hours.

It's a brand-new year filled with fresh reporting deadlines, and perhaps a good time to take note on whether your financial organization is on track to meet these obligations—or to refresh your memory on when specific deadlines occur. First quarter is always a busy reporting season.

If it’s been a while since you’ve worked with Coverdell ESAs, here’s a refresher on the rules and your responsibilities when processing ESA distributions.

Here are answers to some of the common Coverdell ESA questions we receive from financial organizations.

During the Great Depression, a common practice among contractors bidding for federal contracts was reducing workers’ wages; and thereby, their labor costs, to win bids. While prevailing wage laws had existed on a state and local government level for more than three decades at this time, the first and most significant federal law–protecting the workers’ and their families’ welfare–was the Davis-Bacon Act of 1931.

Under most circumstances, a plan sponsor may not distribute plan assets to a participant without the participant’s consent as long as the distribution is “immediately distributable.”

Plan administrators and plan participants must limit the elective deferrals that are contributed to their qualified retirement plans each calendar year to the Internal Revenue Code Section (IRC Sec.) 402(g) limit. The limit includes elective deferrals (including both pretax and designated Roth deferrals) that participants can defer into their qualified retirement plans (in aggregate) for each taxable year.

The Internal Revenue Service recently released Treasury Decision (TD) 10008, which provides guidance on income tax withholding requirements for certain periodic payments and nonperiodic distributions from deferred compensation plans, individual retirement arrangements (IRAs), and commercial annuities.