If you work with health savings accounts (HSAs), you already know the IRS wants a paper trail for just about everything. But sometimes the smartest (and most compliant) move is not reporting a transaction at all.
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The SECURE 2.0 Act has brought significant changes to retirement planning—especially for retirees aged 72 and older. One of the most significant updates is the delay for retirees to take required minimum distributions (RMDs), which now begin at age 73 (age 75 in 2033). While this offers flexibility, it also introduces new challenges that retirees should understand.
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The introduction of code Y has brought up a lot of questions. Here’s what we know so far, and what information we hope to see by the end of the year.
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Just like Traditional IRA owners, an individual with a SEP plan can delay taking his first RMD until April 1 of the year after he attains age 73. This date is known as the required beginning date (RBD). But remember—if the SEP plan owner or participating employee delays taking his first RMD until the following year, he will need to take out two RMDs in the same year: the RMD for year one and the RMD for year two.
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In 2019, the Setting Every Community Up for Retirement Enhancement (SECURE) Act changed eligibility requirements so that employees who are credited with at least 500 hours in three consecutive years (beginning on January 1, 2021), must be allowed to participate under a 401(k) plan’s salary deferral provision.
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As health savings accounts (HSAs) become more popular, questions about how to correct errors also increase. One question financial organizations often receive is, “is this a mistaken distribution?”
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Electing a plan’s definition of compensation may be one of the most important elections in any plan document. The elections made will significantly affect the plan’s design and its operations.
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When a business is acquired or sold, the employer’s business structure may change (e.g., a sole proprietorship may become a corporation); the employer may join or leave a controlled or affiliated service group; or the employer may change for one or more individuals. Such business transactions could affect many aspects of the business’s qualified retirement plan.
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Coverdell education savings accounts (ESAs) provide a unique savings vehicle with the potential to generate tax-free earnings to cover the costs for education.
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As you may have already guessed, this is typically the busiest time of the year for many financial institutions. During the next few months, your staff may be juggling different tasks—including preparing the 2024 IRA reporting forms and answering a higher amount of calls from clients.
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An owner must begin taking money out of her 401(k) plan by April 1 of the year following the year in which she attains age 73 (also known as the owner’s required beginning date).
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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.
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Working with plans that include both nonunion and union employees is not as intimidating as it may seem. There are a few things to keep in mind if you work with a plan that manages both employees that are a part of a union and those that are not union employees.
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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.”
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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.
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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.
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Can an employer establish a SEP or SIMPLE IRA for a minor child employee?
Short answer, yes.
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A plan administrator must take all necessary steps, as determined by the facts and circumstances of the participant’s situation, to determine if the participant is truly missing or nonresponsive.
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