Articles — Ascensus

Spot Check IRA Contribution Reports Before They Go Out in May

Consistently filing incorrect information returns is a red flag to the IRS, prompting questions, a possible IRS audit, and potential financial organization penalties.

3 Options for High Income Earners to Fund Roth IRAs

Taxpayers with income too high to make Roth IRA contributions need not rule out Roth IRAs in their retirement planning strategies. They can use other methods to fund Roth IRAs—retirement plan rollovers, IRA conversions, and the backdoor Roth.

IRAAscensusApril 19, 2018Roth IRA, Compliance & Operations, Rollover, Conversion, Deduction, Contribution

DOL Fiduciary Rule Vacated by 5th Circuit Court of Appeals

The 5th Circuit U.S. Court of Appeals has reversed a district court’s 2016 ruling in favor of the Department of Labor (DOL) fiduciary regulations, stating that the DOL exceeded its statutory authority in issuing its fiduciary regulations.

IRA, Employer PlanAscensusApril 19, 2018Fiduciary, DOL, Regulations

IRA Investments—Are there restrictions?

We are considering offering additional investment opportunities. What are the limitations? Are life insurance and collectibles the only two investments prohibited in an IRA?

IRA, expertAscensusApril 19, 2018Compliance & Operations, Investment, Q&A

Budget Act Broadens Disaster Relief, Rewrites Hardship Rules, and More—Retirement Plan Amendments Expected

Budget Act of 2018 makes important changes to retirement plans and IRAs, including tax relief for California wildfire victims, hardship distribution rules relaxed, and changes to portability rules.

IRS Says 2017 Hurricane Distributions Should Be Reported on Form 1099-R as Penalty Tax Exception

The IRS announced a late change for 2017 Form 1099-R reporting of IRA and retirement plan qualified hurricane distributions. The IRS is not, however, requiring reporting corrections.

Employer Plan, IRAAscensusFebruary 15, 2018News, Retirement Plan, IRA, Disaster, Form 1099-R, Reporting

Tips to Help You Avoid IRA Compliance Blunders

IRA compliance is a big responsibility for financial organizations that administer IRAs, and mistakes do happen. Here are common errors that Ascensus® consultants have found during financial organization IRA compliance reviews.

IRAAscensusFebruary 15, 2018IRA, Compliance & Operations, Reporting, Documents & Amendments, Withholding, Beneficiary

IRA Recharacterizations Past, Present, and After Tax Reform

Tax reform legislation no longer allows taxpayers to undo their IRA conversions and retirement plan rollovers to Roth IRAs, which both have potential for heavy tax hits. Here’s a look at recharacterizations during this 2018 transition year.

IRA, Employer PlanAscensusFebruary 15, 2018Roth IRA, Retirement Plan, Recharacterization, Conversion, Rollover

Get Ready for 2018 Contributions, but Don’t Forget 2017 Prior-Year Contributions

Traffic at financial organizations picks up soon for IRA and health savings account (HSA) contributions. Individuals can start making 2018 contributions, but preparing their 2017 income tax returns often prompt them to make prior-year contributions.

IRA, HSAAscensusJanuary 18, 2018Traditional IRA, Roth IRA, HSA, Contribution, Eligibility, Deduction, Compliance & Operations

How the New DOL Fiduciary Rule Applies to IRAs and HSAs

The financial industry has been hearing about the Department of Labor fiduciary (conflict-of-interest) rule for several years. These rules apply to IRAs, HSAs, and Coverdell ESAs, as well as employer-sponsored retirement plans. While some aspects will not apply until mid-2019, financial organizations should fully evaluate how the rules affect their products and services.

Capture Larger Share of Rollover Market From Beneficiary Rollovers

Accepting rollovers of inherited retirement plan assets is a great way to grow IRA business. Financial organizations interested in capturing a larger share of the rollover market should encourage rollover contributions from employer-sponsored retirement plan beneficiaries.

IRAs: Reporting Oddities

An IRA owner wants to complete a rollover through the new self-certification process. How do we report this? Must we file a corrected Form 1099-R showing a small incorrect amount? Can an IRA beneficiary do a qualified charitable distribution?

IRA, expertAscensusJanuary 18, 2018IRA, Reporting, Beneficiary, Distribution, Form 1099-R, Tax, Compliance & Operations, Withholding, Form 5498, Q&A

Tax Reform Law Affects IRAs, Retirement Plans, and Other Savings Arrangements

Late in December 2017, President Trump signed tax reform legislation into law (Public Law No. 115-97) resulting in fulfillment of one of the GOP’s major 2016 campaign promises. The legislation affects employer-sponsored retirement plans and IRAs, and in some cases, other tax-advantaged savings arrangements.

Employer Plan, IRA, ESAAscensusJanuary 18, 2018News, Compliance & Operations, Congress, Tax, Retirement Plan, IRA, Guidance & Legislation

IRS Issues Reminder About Retirement Effects of Hurricane Relief Legislation

The IRS released a reminder notice in December 2017 of the tax-related relief granted by the Disaster Tax Relief and Airport and Airway Extension Act of 2017. This legislation, enacted in early October 2017, provides special options for those affected by Hurricanes Harvey, Irma, and Maria, including options specific to IRA and employer-sponsored retirement plan assets.

PBGC’s Modified Missing Participant Regulations Now Apply to DC Retirement Plans

The Pension Benefit Guaranty Corporation (PBGC) issued final regulations that modify existing guidance on missing participants and beneficiaries in terminating qualified retirement plans. The revised regulations broaden guidance to now apply to defined contribution (DC) plans, to multiemployer (union) plans covered under PBGC’s pension insurance program, and to certain other DB plans not previously covered.

Employer Plan, IRA, ESAAscensus -January 18, 2018News, Compliance & Operations, Congress, DOL, Tax, Retirement Plan, IRA, Guidance & Legislation

DOL Extends Transition Period for Key Fiduciary Rule Requirements to Mid-2019

The applicability date of several key elements of the Department of Labor (DOL) investment fiduciary guidance has been extended from January 1, 2018, to July 1, 2019. The additional 18-month transition period specifically applies to the controversial Best Interest Contract (BIC) exemption, to the “principal transactions” exemption for asset transactions between investment fiduciaries and employee benefit plans (including IRAs), and to certain proposed restrictions on annuities offered as retirement investments.

Employer Plan, IRA, ESAAscensusJanuary 9, 2018News, Compliance & Operations, DOL, IRS, Tax, Retirement Plan, IRA, Fiduciary, Guidance & Legislation

Common Compliance Problems

When reviewing an IRA owner’s file, we discovered that it contained no opening documents nor evidence of her having received the opening documents. How do we fix this compliance concern?

IRA, expertAscensus -October 5, 2017Reporting, Withholding, IRA, Compliance & Operations, Q&A

Not Always so Easy— When to Use SIMPLE Codes for SIMPLE IRA Reporting

Most financial organizations are familiar with Traditional and Roth IRA distributions, but they may not be as familiar with SIMPLE IRA distributions.

IRA, Employer PlanAscensus -September 29, 2017Reporting, Compliance & Operations, SIMPLE IRA Plan