The deadline for removing 2024 excess contributions and completing recharacterizations is on the horizon. An IRA owner has until his tax return due date, plus extensions, to remove an excess contribution or recharacterize a 2024 contribution.
Read MoreFinancial organizations are not required to send notices to clients or report to the IRS when an annual payment must be taken from an inherited IRA. The beneficiary is responsible for knowing and taking any required life expectancy payments.
Although not required, many financial organizations assist their clients with this calculation.
Read MoreWhen an IRA owner dies, the assets are distributed to beneficiaries, whether named by the IRA owner or determined by IRA document defaults. This can sometimes be a complicated process for financial organizations. And further complications may arise when the original beneficiary dies, leaving the inherited IRA to a successor beneficiary.
Read MoreHealth savings accounts (HSAs) are designed to help people pay for qualified medical expenses, so it’s no surprise that there’s a lot of money going in and out of these accounts. To make it easier for account owners to pay for things like prescriptions or doctor visits, many financial organizations offer HSA debit cards or checks. While these tools add convenience, they can also create problems, especially when they lead to negative balances.
Read MoreMany employers believe that offering loans in qualified retirement plans is a major benefit. Participants have easier access to their savings, in case of an unexpected financial need, and the employer can elect to use payroll deductions to credit loan payments back to the participants’ accounts for administrative ease.
Read MoreAs 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?”
Read MoreIRAs 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.
Read MoreAn 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).
Read MoreThe 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.
Read MoreUnder 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.”
Read MoreAlthough 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.
Read MoreWhile vesting standards have long existed to retain and reward employees, a financial literacy gap can prevent participants from maximizing their vesting opportunities and employers from reusing the nonvested (or forfeited) contributions when an employee terminates employment.
Read MoreA 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.
Read MoreLearn how disaster victims can access their retirement savings.
Read MoreEvery year industry professionals gather with Ascensus trainers at the Ascend conference. Not only do they get to continue their education and refine their expertise in retirement, health, and education savings plans, but they get to submit questions to our highly-qualified trainers. Here are the top questions asked and answered over the week.
Read MoreThe new RMD regulations are not without at least one limitation for spouse beneficiaries, in the form of the “hypothetical RMD.” This could affect a spouse beneficiary who inherits an IRA or qualified retirement plan account before the deceased’s RMDs are required to begin—generally age 73—and who elects the new 10-year beneficiary payout rule in order to delay the onset of required distributions.
Read MoreAs the end of the year approaches, some of your clients may start requesting qualified charitable distributions (QCDs).
Read MoreYou 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.
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