Articles — Ascensus

The Ins and Outs of Navigating Retirement

A retirement plan is one of the most influential benefits that an employer may offer. One question that employers may ask is “How can we help participants get the most out of our retirement plan?”

An IRA Owner Missed His RMD Deadline—What Can We Do?

If you handle IRAs at your financial organization, it’s likely you’ll be the one to inform clients of the tax consequences of a missed required minimum distribution (RMD) deadline. If they fail to take an RMD, they’ll owe a 50 percent excess accumulation penalty tax to the IRS for the amount they didn’t withdraw timely.

Ouch.

How to Handle Complex Beneficiary Scenarios Following Recent Changes

Beneficiary options have become more complex in light of recent guidance, including SECURE Act changes, proposed RMD regulations, and Notice 2022-53. This article may help address some questions that your clients may have.

Differences in Distributions due to Divorce

Divorce is a difficult topic for many people to discuss, but the actual process of a divorce can be even more daunting for couples who have shared assets in a variety of investments, including assets earmarked for retirement.

IRS Extends Remedial Amendment Period for CARES Act

The IRS issued Notice 2022-45, which extends the deadline for amendments to retirement plans and individual retirement arrangements (IRAs) to adopt some provisions relating to distributions and loans under the CARES Act.

2023 Taxable Wage Base Announced

The Social Security Administration has announced the 2023 adjustments for benefits and certain other limitations that are subject to annual cost-of-living adjustment (COLA) indices. One of these includes the Social Security taxable wage base (TWB), which identifies the maximum amount of an individual’s annual earnings that are subject to withholding for Social Security-administered benefits.

Plan Loans – The Pros and Cons

Employers may allow participants to take loan distributions from their qualified retirement plans. If loan distributions are permitted, there are a few details that participants should be aware of when deciding whether to take a loan distribution to meet short-term financial needs.

A Refresher on Recharacterizations

IRA owners have until their federal tax return deadline, plus extensions, to recharacterize a 2021 IRA contribution, so you may be fielding many questions about recharacterizations between now and the October 15 deadline.

IRA, expertAscensusSeptember 15, 2022IRA, Compliance & Operations, Traditional IRA, Roth IRA, Distribution, Contribution, Q&A, Reporting, Form 5498, Form 1099-R

Age and Service Waivers vs. Predecessor Service

When determining if an employee has met a qualified plan’s minimum age and service requirements, many employers first verify the employee’s age and whether the employee has met the service requirement by counting the actual hours worked or by using the hours equivalency or elapsed time methods for determining service.

Trust Beneficiary Basics

Trusts are used in estate planning for many reasons. IRA owners may establish a trust to reduce estate taxes, to control the way their assets are distributed, and to avoid family conflicts. A trust can also be a way for beneficiaries to avoid the costly probate process.

IRAAscensusSeptember 15, 2022Compliance & Operations, Beneficiary, Distribution, IRA, Traditional IRA, Roth IRA, Reporting, Regulations

Senate Finance Committee Formally Introduces EARN Act

Senators Ron Wyden (D-OR) and Mike Crapo (R-ID), Senate Finance Committee Chair and Ranking Member, have introduced S.4808, the Enhancing American Retirement Now (EARN) Act.

IRS Provides Additional Form W-4P, W-4R Guidance

The IRS has provided additional guidance related to federal income tax withholding requirements for retirement plan and IRA payments.

IRS Issues Deadline Relief for Mississippi Water Crisis Victims

The IRS has announced the postponement of certain tax-related deadlines for victims of a water crisis in Mississippi.

Encouraging Retirement Saving in the Gig Economy

Was your dinner delivered to your front door last night or have you gotten a lift to the airport lately by using one of several app-based companies, such as Uber or Lyft? If so, welcome to the gig economy, where “side hustles” are no longer relegated to the sidelines but can be a way of life for many workers.

IRA, HSA, Employer PlanAscensusAugust 18, 2022IRA, 401(k) Plan, HSA, Retirement Plan, SIMPLE IRA Plan, Traditional IRA, Roth IRA

Key Questions to Determine Beneficiary Options

Helping clients determine distribution options after a loved one dies may seem overwhelming, but there are a few simple questions that can guide you to the appropriate options if the individual had assets in an individual retirement arrangement (IRA) or an employer-sponsored retirement plan, such as a 401(k) plan or 403(b) plan.

529 Plans and Coverdell ESAs – What’s the Difference?

When it comes to saving for education, individuals have a variety of options when it comes to the type of savings plan to use. Some types of savings arrangements include tax-advantaged accounts that have certain restrictions, while other types of accounts do not provide tax benefits but offer more flexibility.

ESAAscensusAugust 18, 2022Coverdell ESA, Education

Minors and IRAs

There is no age restriction for contributing to a Traditional or Roth IRA. The primary eligibility requirement is that a person must have eligible compensation.

IRA, expertAscensusAugust 18, 2022Traditional IRA, Roth IRA, IRA

Challenges Can Arise With Service-Based Matching Formulas

Employers sometimes ask if they can reward their more tenured employees by providing them with a more generous matching formula than their less tenured counterparts.