Articles — Ascensus

How Federal Withholding Requirements Apply to IRA Distributions

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?

IRA, expertAscensusOctober 21, 2021Compliance & Operations, IRA, Traditional IRA, Roth IRA, Distribution, Withholding, Q&A

Retirement Plan Vesting and Vesting Schedules Explained

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?

Employer Plan, expertAscensusOctober 21, 2021Compliance & Operations, Retirement Plan, Contribution, Distribution, Q&A

2022 Taxable Wage Base Announced

The Social Security Administration recently announced the 2022 cost-of-living adjustments for certain benefits. Included is the taxable wage base increase from 2021.

IRA, Employer PlanAscensusOctober 21, 2021Compliance & Operations, SEP Plan, Retirement Plan, Contribution

Be Sure Your Clients Understand HSA Distributions

If you have clients who own an HSA, they may have questions about using their HSA money to pay or reimburse themselves for medical expenses that they’ve incurred. Do they understand the tax advantages—and any tax consequences—of HSA distributions? Educating your clients about HSA distributions can help them get the most from their HSA savings.

HSAAscensusSeptember 16, 2021Compliance & Operations, HSA, Distribution, Eligibility

Knowing the Rules Can Help Prevent Invalid IRA Rollovers

An invalid IRA-to-IRA rollover can be a costly mistake for your client—and a headache for your organization as it works to maintain compliance and to correctly report the transaction. Keep in mind these rules before accepting a rollover contribution.

Handling Divorce Assets in Qualified Retirement Plans and IRAs: There Is a Difference

There are differences between how various retirement assets are treated in divorce. Qualified retirement plan assets can be distributed to a former spouse through a document known as a qualified domestic relations order. IRA assets subject to divorce proceedings are paid through a “transfer incident to divorce.”

Transfers Are Nonreportable; No Such Thing as Prior-Year Conversion; 12-Month Limit Only for IRA-to-IRA Rollovers

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?

IRA, expertAscensusSeptember 16, 2021Compliance & Operations, IRA, Traditional IRA, Roth IRA, Conversion, Distribution, Form 1099-R, Form 5498, Rollover, Transfer, Q&A

Deadline Relief Issued for Victims of Various Storms, Wildfires

The IRS recently issued several news releases announcing the postponement of certain tax-related deadlines for victims of various storms and wildfires.

Understanding the Owner-Only 401(k) Plan

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?

Employer Plan, expertAscensusSeptember 16, 2021Compliance & Operations, 401(k) Plan, Contribution, Eligibility, Q&A

The New Year Will Bring New Life Expectancy Tables

Is your organization ready to use the updated life expectancy tables that will take effect on January 1? Last November, the IRS published final regulations that contained revised life expectancy tables. The updated distribution periods will generally provide smaller payment amounts than those calculated with the current tables.

Recent JCT Report Shows Significant Retirement Savings Leakage

The premature spending of retirement savings for purposes other than retirement is likely to cause many retirees to be inadequately prepared during retirement. The congressional Joint Committee on Taxation recently released a report estimating the extent to which retirement accumulations are currently “leaking” from tax-advantaged savings arrangements and why.

Employer Plan, IRAAscensusAugust 19, 2021Industry Trends & Statistics, IRA, Retirement Plan, Congress, Distribution

Life Expectancy Payments as a Beneficiary Distribution Option

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?

expert, IRAAscensusAugust 19, 2021Compliance & Operations, IRA, Beneficiary, Distribution, Q&A

IRS Makes Important Changes to Plan Correction Program

IRS Revenue Procedure 2021-30 contains significant updates to the Employee Plans Compliance Resolution System used by employers to correct certain retirement plan qualification failures so that they can continue to maintain a tax-favored retirement plan. Learn more about the changes.

Sorting Out Hardship Distributions

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?

Employer Plan, expertAscensusAugust 19, 2021Compliance & Operations, Retirement Plan, Distribution, Eligibility, Q&A

IRS Finalizes Mandatory 60-Day Postponement Period for Federally Declared Disasters

The IRS issued final regulations in June to help clarify the new mandatory 60-day postponement period for certain tax-related acts following a federally declared disaster. Learn more about the practical implications of the final regulations.

Deadline Relief Issued for Michigan Storm Victims

The IRS recently postponed certain tax-related deadlines for Michigan victims of severe storms. The tax relief postpones various tax filing and payment deadlines that occurred starting on June 25.

Determining Beneficiary Options, Post-SECURE Act

Confused when it comes to determining beneficiary distribution options for IRAs and qualified retirement plans, especially after the SECURE Act? Since the SECURE Act changes became effective, beneficiary options depend on three primary factors. Be sure to consider all three before making any distributions to your IRA or retirement plan beneficiaries.

Amending IRA Documents: Why, When, and How

Part of maintaining a compliant IRA program is to amend your IRA documents when required. But what does it mean to amend? Why do you have to amend your IRA documents and when? How do you do it? Knowing the answers to those questions may be helpful when faced with what may seem like an overwhelming task.