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.
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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.
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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.
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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.
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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.
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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.
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IRA owners sometimes contribute more than they are permitted. Or they may contribute only to later discover that they cannot deduct the contribution. And sometimes they simply want to take the contribution out for some other reason. Whatever the situation, IRA owners—and financial organizations—must follow detailed rules for excess removals.
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Many plan sponsors believe that the availability of loans in retirement plans is an attractive feature. Specifically, participants are more likely to contribute to a plan if they know that they can access a portion of their plan assets while they are still employed—without having to suffer the accompanying tax consequences.
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There are fundamental differences between correcting SEP and SIMPLE plan excesses, which are generally created by employer contributions, and correcting Traditional and Roth IRA excesses, which are created by the account owner.
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Many defined contribution qualified plans, such as 401(k) plans, allow employers to make a matching contribution. Providing a match may encourage employees to make elective deferral contributions to the plan. There are several guidelines that may affect when matching contributions should be made.
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Individuals may simultaneously convert Traditional IRA assets and roll over pretax 401(k) plan assets to a Roth IRA. The transactions are relatively straightforward from a compliance perspective. Neither are subject to income restrictions or the one-per-12-month rollover rule. Both types of transactions can be done directly, which eliminates concerns over the 60-day rule.
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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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