In addition to highlighting the changes brought about by the SECURE 2.0 Act, the Internal Revenue Service today reminded people 73 years of age and older of the deadline for taking required minimum distributions out of individual retirement accounts (IRAs) and other retirement plans.
Many owners of IRA accounts and retirement plans are required to take out required minimum distributions (RMDs) each year. If these withdrawals are not made on schedule, fines may apply as they represent taxable income. The new rules in the statute are explained in detail on the IRS’s retirement plan and IRA required minimum distributions FAQs webpage.
The SECURE 2.0 Act eliminated RMDs for designated Roth accounts in 401(k) and 403(b) retirement plans and increased the age at which account owners must start taking RMDs.
The minimum distribution rules generally apply to original account holders and their beneficiaries in these types of plans:
- IRAs: IRA withdrawals from traditional IRAs and IRA-based plans occur every year once people reach age 73, even if they’re still employed.
- Retirement plans: The RMD rules apply to employer-sponsored plans, with delays allowed until retirement unless the participants own more than 5% of the sponsoring business.
- Roth IRAs: Roth IRA owners are not required to take withdrawals during their lifetime, however beneficiaries are subject to the RMD rules after the account owner’s death.
The RMD regulations will not apply to designated Roth funds in 401(k) or 403(b) plans if the account owner is still living in 2024. Key RMD regulations for defined contribution plans and IRAs are described in the RMD comparison chart .
To find out more about how Wilson Tax Law Group, could help with your tax litigation and defense needs, we invite you to set up a consultation with our firm.
Wilson Tax Law Group, APLC is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board. Wilson Tax Law Group is comprised of former IRS litigators & Special Agents, and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division, which at the time handled both civil tax lawsuits and criminal tax prosecutions on behalf of the United States of America.
For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC
Tel: (949) 397-2292 (Newport Beach Office)
Tel: (714) 463-4430 (Yorba Linda Office)
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