Some exceptions apply universally across both qualified retirement plans (QRPs) and individual retirement accounts (IRAs). Some exceptions, however, are unique to QRPs and some are unique to IRAs.
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For earnings in a Roth IRA to be tax-free, a distribution must be “qualified.” Find out the differences between qualified and nonqualified Roth IRA distributions.
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There are three main types of correction programs under the IRS, collectively referred to as the Employee Plans Compliance Resolution System (EPCRS). These include the Self-Correction Program (SCP), Voluntary Correction Program (VCP), and Correction on Audit Program (Audit CAP).
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As your clients prepare their tax returns, you may find yourself receiving a barrage of tax reporting questions. Hopefully, here are the answers to some of your challenging questions during tax season.
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Plan sponsors should evaluate their plans for protected benefits when they make a discretionary amendment or when there is an acquisition or merger of plans.
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Nondeductible employee contributions, otherwise known as after-tax contributions, are available in qualified plans like 401(k), 403(b), or money purchase pension plans. Depending on the plan design, individuals can increase their qualified plan Roth assets by making nondeductible contributions and then rolling over (i.e., converting) the assets to a designated Roth account within the plan.
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A qualified HSA funding distribution allows HSA owners to directly move their Traditional or Roth IRA assets to their HSA as a regular contribution. Qualified HSA funding distributions are not deductible, however, and cannot be treated as a prior-year contribution.
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A qualified domestic relation order, or QDRO, is generally issued in connection with the payment of child support, alimony, or the division of marital property from a qualified retirement plan, 403(b) plan, or governmental 457(b) plan assets.
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A simplified employee pension (SEP) plan offers many advantages not available with qualified retirement plans. Even though a SEP plan may be easier for an employer to maintain, questions from both employers and employees still arise.
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When each spouse owns 100 percent of their own business, are their businesses considered separate employers or a single employer for qualified retirement plan purposes? What situations involving spouses could cause businesses to be treated as a single employer?
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What is separate accounting? How are IRA assets moved to separate accounts? Is there a deadline to establish separate accounts? Who is a designated beneficiary and why is knowing that important?
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What is the difference between ERISA and non-ERISA 403(b) plans? Does ERISA apply to the 403(b) plans established by religious organizations? What are the implications of being subject to Title I of ERISA?
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Are IRA owners always allowed to waive federal withholding on IRA distributions? What are the withholding requirements for nonresident aliens? Do the withholding rules apply to Roth IRA distributions?
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What is vesting as it relates to a defined contribution retirement plan? How is vesting applied in defined contribution retirement plans? What are the possible vesting schedules?
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What should your clients do if an IRA-to-IRA transfer they’ve done is reported to the IRS? Are clients allowed to do prior-year conversions? Does an IRA-to-IRA rollover after a conversion of those same assets violate the one-per-12-month rule?
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What is an owner-only 401(k) plan? How much can be contributed to an owner-only 401(k) plan? What makes an owner-only 401(k) plan appealing?
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What are beneficiary life expectancy payments and how are they calculated? Whose distribution period do we use? Are life expectancy payments an option for all beneficiaries?
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Confused about the rules for hardship distributions from employer-sponsored retirement plans after the recent legislative and regulatory changes? What changes were made to the safe harbor hardship distribution standard? Can hardship distributions be taken from any asset source in the plan?
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