IRA — Articles — Ascensus

IRS Form 5498 Refresher

As your financial organization prepares to file Form 5498, IRA Contribution Information, to the IRS and send copies to your clients, it is a great time to familiarize yourself with what the form reports.

IRAAscensusMay 15, 2025Traditional IRA, Roth IRA, IRA, IRS, Reporting

Surprise! IRS Sneaks in New Code for Reporting IRA Qualified Charitable Distributions (QCDs)

Buried within the newly released 2025 Form 1099-R instructions is a reporting change you may have missed, but one that is important to know about if you work with IRAs.

IRAAscensusApril 17, 2025Traditional IRA, Required Minimum Distributions, IRS, Regulations, Reporting

Early Distributions and Penalty Tax Exceptions

IRAs and qualified retirement plans (QRPs) are intended to be used for retirement. Therefore, the tax laws and regulations encourage people to leave their money in an IRA or QRP until they retire. If distributions are taken from an IRA (including an IRA holding SEP contributions) or QRP before the account owner reaches age 59½, a 10 percent early distribution penalty tax is assessed on the taxable amount of the distribution, unless a penalty tax exception applies.

Making Sense of POAs

Power of attorney (POA) legal arrangements are becoming a prevalent tool that retirees use to manage their finances—including their IRA assets. Under such an arrangement, an individual—including an IRA owner—may grant to another the legal authority to act on his behalf in financial or other matters. To reduce liability, financial organizations should create a process for reviewing, accepting, and responding to a POA.

IRAAscensusApril 17, 2025Traditional IRA, Roth IRA, Regulations, Reporting

Deadlines for IRA Activities and Possible Postponements

If a client has received an extension to file his taxes, he may believe that he has an extension to make a prior-year contribution. It is important to understand that a tax filing extension is not an extension to make a prior-year IRA contribution: it is only an extension to file the tax return. But other postponements may apply to some of your clients.

Employer Plan, IRAAscensusApril 17, 2025Disaster, IRA, SEP Plan, Retirement Plan, Roth IRA, IRS, Guidance and Legislation, Contributions

The 10-Year Rule is Here to Stay

The SECURE Act—officially known as the Setting Every Community Up for Retirement Enhancement Act of 2019—made significant changes to IRA and retirement plan rules, including to the beneficiary payout options. One of the most noteworthy changes involves the 10-year rule, which requires a total distribution of inherited assets by December 31 of the year containing the 10th anniversary of the account owner’s death.

IRAAscensusMarch 20, 2025IRA, IRS, Beneficiary, Transfer, Traditional IRA

Understanding IRA Prohibited Transactions

The prohibited transaction rules are in place to ensure that IRA transactions are managed in a way that benefits the IRA itself in the long run, rather than providing short-term gains to the IRA owner.

IRAAscensusMarch 20, 2025Prohibited Transaction, IRA, IRS, Regulations, Compliance & Operations

Treasury Announces Suspension of Enforcement of Corporate Transparency Act

The Treasury Department announced March 11, 2025, that it will not enforce penalties or fines associated with the beneficial ownership information reporting rule under existing regulatory deadlines pursuant to the Corporate Transparency Act (CTA).

Recent Changes Let Workers Save More

With the arrival of a new year comes the availability of several SECURE 2.0 provisions that affect how workers can save for their retirement.

Employer Plan, IRAAscensusFebruary 20, 2025IRA, SEP Plan, SIMPLE IRA Plan, Contribution, Retirement Plan, Qualified Retirement Plan

Federal Withholding for U.S. and Non-U.S.-Based IRA Payees

Final federal withholding regulations were released in Treasury Decision (TD) 10008 on October 21, 2024. They address withholding requirements for payments made outside the United States.

expert, IRAAscensusFebruary 20, 2025Roth IRA, Withholding, IRA, IRS

Happy 50th Birthday, Traditional IRAs: A Look Back at a Half-Century of Retirement Savings

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.

IRAAscensusJanuary 16, 2025Traditional IRA, Roth IRA, Required Minimum Distributions, Business Insights, Congress

Roth IRA Beneficiary Options and Reporting Requirements

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.

IRAAscensusJanuary 16, 2025Roth IRA, Beneficiary, IRA, Traditional IRA, Reporting

IRA RMD Statement Requirements

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.

RMD Regulations’ Year-of-Death Rules Yield Both Answers and Questions

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.

IRAAscensusDecember 19, 2024Traditional IRA, Beneficiary, Regulations, Required Minimum Distributions, Roth IRA, IRS

Understanding RMDs

Although RMDs from separate IRAs can be aggregated and taken from one Traditional IRA, individuals cannot satisfy RMDs from qualified retirement plans by taking a Traditional IRA distribution. In addition, individuals cannot satisfy Traditional IRA RMDs by taking distributions from their qualified retirement plans.

expert, IRAAscensusDecember 19, 2024Required Minimum Distributions, Traditional IRA, Retirement Plan, Distribution

IRS Releases Final Regulations on Tax Withholding Requirements

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.

2025 Brings More Deferral Opportunities for Employees

Thanks to the SECURE 2.0 Act, certain employees will have more deferral opportunities beginning in 2025. Learn how much employees can contribute to their retirement plan and about the types of deferrals that may be available.

IRS Releases 2025 Cost-of-Living Adjusted Retirement Savings Limitations

The IRS has issued Notice 2024-80, which contains the 2025 cost-of-living adjustments (COLAs) for IRA and employer-sponsored retirement plan dollar limitations on benefits and contributions under the Internal Revenue Code.