Posts Tagged ‘Individual Retirement Account’
Posted by William Byrnes on March 21, 2014
In Announcement 2014-15 that will be published in IRB 2014-16 on April 14, 2014, the IRS alerted trustees that it has had a major about turn on how its views the one-per-year limit on IRS rollovers. It’s view will now be much more restrictive on roll overs. What brought about the change of thinking? The January 28, 2014 Tax Court decision of Bobrow v. Commissioner.
Section 408(d)(3)(A)(i) provides generally that any amount distributed from an IRA will not be included in the gross income of the distributee to the extent the amount is paid into an IRA for the benefit of the distributee no later than 60 days after the distributee receives the distribution. Section 408(d)(3)(B) provides that an individual is permitted to make only one rollover described in the preceding sentence in any one-year period.
Proposed Regulation § 1.408-4(b)(4)(ii) and IRS Publication 590, Individual Retirement Arrangements (IRAs), provide that this limitation is applied on an IRA-by-IRA basis. However, a recent Tax Court opinion, Bobrow v. Commissioner, T.C. Memo. 2014-21, held that the limitation applies on an aggregate basis, meaning that an individual could not make an IRA-to-IRA rollover if he or she had made such a rollover involving any of the individual’s IRAs in the preceding 1-year period. The Tax Court stated at page 12:
“The plain language of section 408(d)(3)(B) limits the frequency with which a taxpayer may elect to make a nontaxable rollover contribution. By its terms, the one-year limitation laid out in section 408(d)(3)(B) is not specific to any single IRA maintained by an individual but instead applies to all IRAs maintained by a taxpayer. Section 408(d)(3)(B) speaks in general terms: An individual may not receive a nontaxable rollover from “an individual retirement account or individual retirement annuity” if that individual has already received a tax-free rollover within the past year from “an individual retirement account or an individual retirement annuity.””
The Tax Court continued at page 13, looking at Congress’ intent surrounding the enactment of section 408(d)(3)(B):
“Section 408 was enacted as part of the Employee Retirement Income Security Act of 1974, Pub. L. No. 93-406, sec. 2002(b), 88 Stat. at 958. Recognizing that the American workforce had become much more mobile than in previous years, Congress enacted the section 408(d)(3)(A) exemption as a way of providing employees with some measure of flexibility with regard to their retirement planning. However, Congress added the section 408(d)(3)(B) limitation as a way to ensure that taxpayers did not take advantage of section 408(d)(3)(A) to repeatedly shift nontaxable income in and out of retirement accounts.”
Thus, the Tax Court concluded that: “Had Congress intended to allow individuals to take nontaxable distributions from multiple IRAs per year, we believe section 408(d)(3)(B) would have been worded differently.”
The IRS announced that it anticipates that it will follow the interpretation of § 408(d)(3)(B) in Bobrow and, accordingly, intends to withdraw the proposed regulation and revise Publication 590 to the extent needed to follow that interpretation. These actions by the IRS will not affect the ability of an IRA owner to transfer funds from one IRA trustee directly to another, because such a transfer is not a rollover and, therefore, is not subject to the one-rollover-per-year limitation of § 408(d)(3)(B). See Rev. Rul. 78-406, 1978-2 C.B. 157.
What Happens Now?
The IRS has received comments about the administrative challenges presented by the Bobrow interpretation of § 408(d)(3)(B). The IRS understands that adoption of the Tax Court’s interpretation of the statute will require IRA trustees to make changes in the processing of IRA rollovers and in IRA disclosure documents, which will take time to implement. Accordingly, the IRS will not apply the Bobrow interpretation of § 408(d)(3)(B) to any rollover that involves an IRA distribution occurring before January 1, 2015. Regardless of the ultimate resolution of the Bobrow case, the Treasury Department and the IRS expect to issue a proposed regulation under § 408 that would provide that the IRA rollover limitation applies on an aggregate basis. However, in no event would the regulation be effective before January 1, 2015. The Announcement is available http://www.irs.gov/pub/irs-drop/a-14-15.pdf
Warning on IRA Rollovers: Regulators to Scrutinize Suitability: Tomorrow’s blog article will provide another Warning on IRA Rollovers: Regulators to Scrutinize Suitability!
Authoritative and easy-to-use, 2014 Tax Facts on Insurance & Employee Benefits shows you how the tax law and regulations are relevant to your insurance, employee benefits, and financial planning practices. Often complex tax law and regulations are explained in clear, understandable language. Pertinent planning points are provided throughout.
Organized in a convenient Q&A format to speed you to the information you need, 2014 Tax Facts delivers the latest guidance on:
- Estate & Gift Tax Planning
- IRAs
- HSAs
- Capital Gains, Qualifying Dividends
- Non-qualified Deferred Compensation Under IRC Section 409A
- And much more!
Key updates for 2014:
- Important federal income and estate tax developments impacting insurance and employee benefits including changes from the American Taxpayer Relief Act of 2012
- Concise updated explanation and highlights of the Patient Protection and Affordable Care Act (PPACA)
- Expanded coverage of Annuities
- New section on Structured Settlements
- New section on International Tax
- More than thirty new Planning Points, written by practitioners for practitioners, in the following areas:
- Life Insurance
- Health Insurance
- Estate and Gift Tax
- Deferred Compensation
- Individual Retirement Plans
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Posted in Retirement Planning, Taxation, Uncategorized, Wealth Management | Tagged: Individual Retirement Account, IRA, IRA rollover | Leave a Comment »
Posted by William Byrnes on January 30, 2014
A “qualified rollover contribution” can be made from a traditional IRA or any eligible retirement plan to a Roth IRA. Amounts that are held in a SEP or a SIMPLE IRA that have been held in the account for two or more years also may be converted to a Roth IRA.
Read the three page of planning tips from William Byrnes and Robert Bloink’s Tax Facts Online analysis at > Think Advisor <
The new myRA, to be established by Treasury under request of President Obama, is covered previously in this blog at > myRA < Several blog subscribers have emailed me with policy and operational questions about the “myRA“. A vein of questions that I find particularly interesting is whether tax policy rests with the executive instead of Congress? The myRA has a tax benefit (tax exemption during the earnings period) and a cost (no fees to be passed onto the employee, but as the adage goes: “there is no free lunch”). Tax Policy (tax imposition and tax benefit) should be established by Congress as part of the democratic process of establishing a fiscal budget. Yet, this norm is not absolute because Congress handed over of both establishing and enforcing regulation to the Executive (Treasury in this case). Establishing and enforcing the regulations also impacts policy. If you care to comment directly in the blog, do so below or feel free to continue sending me your comments directly.
Authoritative and easy-to-use, 2014 Tax Facts on Insurance & Employee Benefits shows you how the tax law and regulations are relevant to your insurance, employee benefits, and financial planning practices. Often complex tax law and regulations are explained in clear, understandable language. Pertinent planning points are provided throughout.
Organized in a convenient Q&A format to speed you to the information you need, 2014 Tax Facts on Insurance & Employee Benefits delivers the latest guidance on:
- Estate & Gift Tax Planning
- Roth IRAs
- HSAs
- Capital Gains, Qualifying Dividends
- Non-qualified Deferred Compensation Under IRC Section 409A
- And much more!
Key updates for 2014:
- Important federal income and estate tax developments impacting insurance and employee benefits including changes from the American Taxpayer Relief Act of 2012
- Concise updated explanation and highlights of the Patient Protection and Affordable Care Act (PPACA)
- Expanded coverage of Annuities
- New section on Structured Settlements
- New section on International Tax
- More than thirty new Planning Points, written by practitioners for practitioners, in the following areas:
- Life Insurance
- Health Insurance
- Estate and Gift Tax
- Deferred Compensation
- Individual Retirement Plans
Plus, you’re kept up-to-date with online supplements for critical developments. Written and reviewed by practicing professionals who are subject matter experts in their respective topics, Tax Facts is the practical resource you can rely on.
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Posted in Retirement Planning, Wealth Management | Tagged: Byrnes, income tax, Individual Retirement Account, IRA, Retirement, Roth IRA, Traditional IRA | Leave a Comment »
Posted by William Byrnes on January 27, 2014
Q. When are funds in an IRA taxed?
Funds accumulated in a traditional IRA generally are not taxable until they actually are distributed. Funds accumulated in a Roth IRA may or may not be taxable on actual distribution. Special rules may treat funds accumulated in an IRA as a “deemed distribution” and, thus, includable in income.
Read the three page planning tips and analysis of William Byrnes and Robert Bloink at Tax Facts Online > Think Advisor <
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Posted in Retirement Planning, Wealth Management | Tagged: Byrnes, income tax, Individual Retirement Account, IRA, Retirement | Leave a Comment »
Posted by William Byrnes on December 20, 2013
The IRS released Special Edition Tax Tip 2013-16 in time for Christmas within which it offers three year end tips to help taxpayers prepare for the tax filing season. The IRS three tax tips are as follows:
1. Start a filing system. If you don’t have a filing system for your tax records, you should start one. It can be as simple as saving receipts in a shoebox, or more complex like creating folders or spreadsheets. It’s always a good idea to save tax-related receipts and records. Keeping good records now will save time and help you file a complete and accurate tax return next year.
2. Make Charitable Contributions. If you plan to give to charity, consider donating before the year ends. That way you can claim your contribution as an itemized deduction for 2013. This includes donations you charge to a credit card by Dec. 31, even if you don’t pay the bill until 2014. A gift by check also counts for 2013 as long as you mail it in December. Remember that you must give to a qualified charity to claim a tax deduction. (See the blog posting on December 19 here under regarding the IRS charitable giving year-end tips and compliance notes.)
3. Contribute to Retirement Accounts. You need to contribute to your 401(k) or similar retirement plan by Dec. 31 to count for 2013. On the other hand, you have until April 15, 2014, to set up a new IRA or add money to an existing IRA and still have it count for 2013.
The Saver’s Credit, also known as the Retirement Savings Contribution Credit, helps low- and moderate-income workers in two ways. It helps people save for retirement and earn a special tax credit. Eligible workers who contribute to IRAs, 401(k)s or similar workplace retirement plans can get a tax credit on their federal tax return. The maximum credit is up to $1,000, $2,000 for married couples. Other deductions and credits may reduce or eliminate the amount you can claim.
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Posted in Retirement Planning, Tax Exempt Orgs, Taxation | Tagged: Individual Retirement Account, Internal Revenue Service, IRS, Itemized deduction, tax, Tax deduction, Tax return (United States) | Leave a Comment »
Posted by William Byrnes on March 21, 2012
Partners in a partnership and members of an LLC, taxed as a partnership, cannot have individual SEP IRAs (Simplified Employee Pension Individual Retirement Account) plans, according to the IRS.
Only employers are capable of implementing SEP plans for their employees. Because partners are employees of the partnership for retirement plan purposes, they cannot have an individual SEP plan. If partners in a partnership wish to use a SEP plan, the partnership as an entity must maintain and contribute to the plan for the partners.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of IRAs in Advisor’s Journal, see Qualified Charitable Distributions from an IRA (CC 11-03) & How Are IRA Owners Investing Their Money? (CC 11-112).
For in-depth analysis of SEPs, see Advisor’s Main Library: IRAs and SEPs.
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Posted in Wealth Management | Tagged: 401(k), Business, Employment, Individual Retirement Account, Internal Revenue Service, Pension, Roth IRA, SEP-IRA | Leave a Comment »
Posted by William Byrnes on October 19, 2011
Although at least 25 percent of all US retirement assets are held in personal retirement accounts (IRAs), until now, only limited data existed on asset allocations in IRAs. Consequently, the retirement prospects of retirees owning IRAs have been a mystery.
New developments from the Employee Benefit Research Institute (EBRI) gives us a preview into self-directed accounts like IRAs, providing hard data on the investing behavior of account owners and giving us insight into common problem areas in these accounts.
EBRI’s database includes information on 11.1 million individuals’ 14.1 million individual retirement accounts. Assets in the tracked accounts amount to $732.9 billion.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of IRAs in Advisor’s Journal, see Maximize IRA Stretch with Individual Inherited IRA Accounts (CC 10-69) and To Convert or Not to Convert, That is the Question (CC 07-40).
For in-depth analysis of IRAs, see Advisor’s Main Library: A – Introduction to Individual Retirement Plans (IRAs).
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Posted in Taxation, Wealth Management | Tagged: Business, Individual Retirement Account, Pension, Retirement, Roth IRA, tax, Traditional IRA, TurboTax | Leave a Comment »
Posted by William Byrnes on April 7, 2011
Why is this Topic Important to Wealth Managers? This topic discusses proposed legislation that would change defined contribution retirement reporting for plan sponsors. The new legislation would require additional information to be disclosed to consumers. Thus, wealth managers that are prepared with the most recent and relevant information with regards to retirement planning are better prepared to work with clients in defined contribution situations.
Senior members of the House Committee on Education and the Workforce, including U.S. House of Representatives Rush Holt (NJ) and Tom Petri (WI), recently introduced legislation which is designed to help ensure that Americans have saved enough for their full retirement.
The introducers of the bill note that many American workers have become increasingly responsible for saving for and managing their retirement investments through 401(k) plans. However, the contention is that many Americans are not saving enough, and they are unsure how quickly to draw down their savings in their retirement years.
To that end, the Lifetime Income Disclosure Act [1] would require 401(k) plan sponsors to inform participating workers of the projected monthly income they could expect at retirement based on their current account balance. The measure is patterned on the Social Security Administration’s annual statements, which are mailed annually to working Americans to inform them of estimated monthly benefits based on their current earnings. Congress mandated annual Social Security statements in 1989, and the government claims they have proven to be very useful to workers in preparing for retirement.
“We should do everything we can to help Americans save for retirement. Our bipartisan bill is a common sense approach to providing Americans with the tools and information they need to plan for a secure retirement future,” Rep. Holt said. The idea behind the legislation is that by providing similar information for 401(k) plans, the Lifetime Income Disclosure Act would give American workers a more complete snapshot of their projected income in retirement.
Specifically, under the legislation, defined contribution plans subject to ERISA – including 401(k) plans – would be required annually to inform participants of how the account balance would translate into a monthly income stream based on age at retirement and other factors. “As retirement plans shift increasingly toward a defined contribution basis, individuals have a greater responsibility to ensure that they are providing adequately for their retirement,” Rep. Petri said. “The information called for in the Lifetime Income Disclosure Act will serve as a scorecard showing savers their progress toward reaching this critical financial goal.”
To help ensure there is no material burden or potential liability on employers who voluntarily sponsor 401(k) plans, the legislation directs the Department of Labor to issue tables that employers may use in calculating an annuity equivalent, as well as a model disclosure. Employers and service providers using the model disclosure and following the prescribed assumptions and DOL rules would be insulated from liability.
“Half of American households will lack sufficient retirement income to maintain their pre-retirement standard of living, but many are unaware of their vulnerability. Our bill will empower Americans to determine whether they are on a path to a secure retirement,” said Senator Jeff Bingaman (D-NM). “This is the kind of common-sense, employer-friendly bill that deserves priority consideration.”
Such information in the hand of the consumer may lead to more retirement planning opportunities for wealth managers as the consumer seeks to “top up” for retirement. If enacted, this bill may lead to a big boost for such retirement savings as Individual Retirement Accounts, and for the corresponding asset management for institutions.
Senators Bingaman, Johnny Isakson (R-GA), and Herb Kohl (D-WI) previously introduced the legislation in the Senate, and Rep. Ron Kind (WI) and David Reichert (WA) are cosponsors of the bill.
Tomorrow’s blogticle will continue to discuss new and exciting planning aspects of 2011.
We invite your opinions and comments by posting them below, or by calling the Panel of Experts
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Posted in Retirement Planning | Tagged: 401(k), Herb Kohl, Individual Retirement Account, Johnny Isakson, Pension, Tom Petri, United States, United States House Committee on Education and the Workforce | Leave a Comment »
Posted by William Byrnes on March 2, 2011
SEP is a written plan that allows a business to make contributions toward executive’s retirement and employees’ retirement without getting involved in a more complex qualified plan.
Under a SEP, the business makes the contributions to a traditional individual retirement arrangement (called a SEP-IRA) set up by or for each eligible employee. A SEP-IRA is owned and controlled by the employee, and the business makes contributions to the financial institution where the SEP-IRA is maintained.
SEP-IRAs are set up for, at a minimum, each eligible employee. An eligible employee means an individual who meets all the following requirements: the individual has reached age 21, has worked for the business in at least 3 of the last 5 years, and has received at least $550 in compensation from the business in 2010.
There are three basic steps in setting up a SEP. Read the analysis at AdvisorFYI
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Posted in Retirement Planning | Tagged: Business, Employment, Individual Retirement Account, Internal Revenue Service, Pension, Retirement, SEP-IRA, tax | Leave a Comment »
Posted by William Byrnes on February 22, 2011
As reported earlier this month in Advisor’s Journal [Qualified Charitable Distributions from an IRA (CC 11-03))], a qualified charitable distribution (QCD) of up to $100,000 made from an IRA will not be included in the taxpayer’s gross income, as long as the contribution is made directly from the trustee to a public charity or conduit private foundation when the account owner is at least 70½ years old.
One benefit of taking a QCD is that it can qualify as a required minimum distribution (RMD). For the taxpayer who does not have a financial need for the distribution, making a QCD is an opportunity to take the RMD—avoiding the severe tax penalties for not taking the distribution—while excluding the distribution from taxable income.
But because the QCD provision lapsed during 2010, taxpayers who took an RMD during 2010 are out-of-luck.
Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
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Posted in Retirement Planning | Tagged: Charitable organization, Individual Retirement Account, Internal Revenue Service, Pension, Roth IRA, tax, Taxation, Traditional IRA | Leave a Comment »
Posted by William Byrnes on February 8, 2011
Recently some wealth managers have established trustee services with regards to retirement accounts. It’s a good fit, generally, when the wealth manager can offer clients information regarding deductible contributions to a retirement account, and further act as a fiduciary vis-à-vis trustee of those funds.
What are the basic requirements in order to act in the capacity as a trustee for IRA and other retirement account purposes?
First, an Individual Retirement Account (IRA) must be a trust created or organized in the United States for the exclusive benefit of an individual or his beneficiaries. Such trust must be maintained at all times as a domestic trust in the United States. The instrument creating the trust must be in writing.
Secondly, the trustee of an IRA trust may be a person other than a bank if the person demonstrates to the satisfaction of the Commissioner of the Internal Revenue Service that the manner in which the person will administer trusts will be consistent with the requirements of the tax code. The person must submit a written application including the information discussed below. Read further at AdvisorFYI
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Posted in Pensions, Trusts | Tagged: Individual Retirement Account, Internal Revenue Service, Retirement, Roth IRA, tax, Trust law, Trustee, United States | Leave a Comment »
Posted by William Byrnes on January 29, 2011
President Obama’s tax compromise—the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Tax Relief Act)—includes a provision that permits qualified charitable distributions to be made directly from an individual retirement account.
Generally, to make a charitable contribution from an IRA, the account owner has to take a distribution from the account, pay any tax due on the contribution, and then make the charitable contribution. An account owner can also name a charity as a beneficiary of the retirement account. Direct qualified charitable distributions take out the middle step, keeping the distribution out of the taxpayer’s taxable income … Read this complete analysis of the impact at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
For previous coverage of individual retirement accounts in Advisor’s Journal, see Maximize IRA Stretch with Individual Inherited IRA Accounts (CC 10-69) and The Automatic IRA Act of 2010: Boon for Advisors? (CC 10-56).
For in-depth analysis of individual retirement accounts, see Advisor’s Main Library: IRAs and SEPs.
We invite your questions and comments by posting them in our blog AdvisorFYI or by calling the Panel of Experts.
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Posted in Taxation | Tagged: Barack Obama, Boon, Individual Retirement Account, Internal Revenue Service, Retirement, Roth IRA, tax, Unemployment benefits | Leave a Comment »
Posted by William Byrnes on December 30, 2010
Why is this Topic Important to Wealth Managers? Provides analysis for those wealth managers who may be considering a Roth IRA conversion for their clients. Discusses potential benefits and detriments as well as comparative analysis.
There is a lot of talk of Roth IRA roll-overs this year as 1) the AGI limit on conversions has been lifted, and 2) for conversions in 2010, the tax owed is required as income not in 2010, but rather half in 2011 and half in 2012. And the tax rates will remain stable and low for both these years – signed into law as part of the Obama Tax Cut Compromise (See rates for 2011 and 2012 here).
On its face, many wealth managers have good reason to consider the conversion for their clients this year. But the question becomes, does it make sense, economically?
The crux of the problem lies in the early withdrawal penalties on the IRA, which is 10% if the account owner takes a distribution before age 59 1/2 or past allowable annual distribution limits before age 70 1/2.
Let’s take a look at two examples of situations where conversions may be considered this year (thus one day left….) To read this article excerpted above, please access www.AdvisorFX.com
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Posted in Retirement Planning | Tagged: Adjusted Gross Income, AGI, Individual Retirement Account, Retirement, Roth IRA, tax, Tax rate, Traditional IRA | Leave a Comment »
Posted by William Byrnes on December 13, 2010
Why is this Topic Important to Wealth Managers? Many US expats who do not work for a US headquartered company are failing to report pensions they are accruing from the companies they are working for overseas. These clients may incur large reporting penalties.
Submission by Thomas Carden, IRS Enrolled Agent
Many expats that do not work for a US based company are failing to report pensions they are accruing from the overseas companies they are working for. They often disregard the pension because they incorrectly assume that it is not taxable in the US.
However, the vast majority of foreign pension plans are not considered to be qualified by the IRS. Consequently, these foreign pension plans do not enjoy any tax mitigation – the plans are taxable.
The IRS has very rigorous regulations for plan reporting and for the criteria to be a qualified plan, and thus foreign employers rarely seek such plan qualification. Compounding the problem is that most financial professionals are rarely asking their clients with foreign employers “Do you have a foreign pension that contributions are being made to?”
Because of this mistaken belief that such foreign pension plans are to be treated like those in the US, many expats are incorrectly reporting their income net of any pension contributions.
Before FATCA (the Foreign Account Tax Compliance Act of 2010) the pension contributions were generally not being reported to the IRS, thus they were incorrectly escaping taxation on US returns. The goal of FATCA is to substantially capture information on the number of these accounts and many other foreign account types turning that information over to the IRS. The act puts onerous penalties on financial institutions that do not report accounts that are in the names of US citizens and other US taxable persons.
Any foreign institution that does not agree will be subject to a thirty percent withholding rate on payments made to it. Because of the penalties and the general move toward cross border reporting in financial transactions, the IRS will be receiving a large amount of information on these previously unreported accounts. The act also requires individuals to disclose any foreign accounts with a balance that exceeds $50,000. Failure to do so may result in an initial fine of $10,000 plus additional penalties.
The good news is that the acts reporting requirements are set to begin on January 2nd of 2012. Thus, expats have time to address the issue of unreported foreign pensions. The problem for expats with these unreported accounts is that the contributions are counted as taxable income in the US for the year they were made to the pension. If the IRS receives information about such an account, it is highly probable that it will send a “deficiency letter” stating that tax is due on the unreported amount. At worst, finding an unreported account may trigger an arduous audit.
The solution for the problem is for expats with any unreported pension accounts to amend the returns and restate the income received, for any years that contributions were made to the accounts. Such disclosures for past non-reporting should probably be handled by a expert in this area to avoid any unnecessary penalties.
Submission by Thomas Carden, a IRS Enrolled Agent and Expatriate Tax Specialist with 15 years of Tax and Financial Services Experience. He is currently enrolled in the Diamond Program at Thomas Jefferson School of Law while also studying to sit for the ATT tax designation in the UK. You may contact him via his email – tmcarden@yahoo.com.
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Posted in Taxation | Tagged: Financial services, Individual Retirement Account, Internal Revenue Service, Pension, tax, Tax avoidance and tax evasion | Leave a Comment »
Posted by William Byrnes on December 7, 2010
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Although IRS-approved retirement plans are intended to allow plan participants to sock away cash for retirement, some emergencies will permit a participant to withdraw plan funds prior to retirement—and there may be options to reduce or eliminate any tax due on the withdrawal.
Serving as a great reminder of the general principals of emergency distributions, the IRS recently ruled whether a qualified plan was permitted to make “unforeseeable emergency distributions” in three fact scenarios. In the first, the plan participant wanted to take an emergency distribution to repair water damage to his home. In the second situation, the participant requested an emergency distribution to pay his nondependent son’s funeral expenses. In the third situation, the participant requested an emergency distribution to pay “accumulated credit card debt.” Read this complete article at AdvisorFX (sign up for a free trial subscription with full access to all of the planning libraries and client presentations if you are not already a subscriber).
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Posted in Taxation | Tagged: Business, Credit card debt, Individual Retirement Account, Internal Revenue Service, Pension, Retirement, Roth IRA, tax | Leave a Comment »
Posted by William Byrnes on October 15, 2010
Many clients with employer-provided retirement accounts can now convert their accounts to Roth accounts thanks to the Small Business Jobs and Credit Act of 2010, H.R. 5297—which was signed into law by President Obama on Monday, September 27. The Act allows 401(k), 403(b), and governmental 457(b)participants to roll all, or a portion, of their account balances into an employer-provided Roth account. Converting from a traditional to a Roth account can have substantial tax benefits for your clients. But because of the complexity of the decision whether to convert, most clients will need their advisor’s assistance when deciding whether to convert their accounts.
For an analysis of the impact of the extension of the Roth Conversion Window, see Advisor’s Journal Small Business Bill Extends the Roth Conversion Window.
For previous coverage in Advisor’s Journal, see Liberalized IRA to Roth IRA Conversion Rules in 2010
For in-depth analysis of the topic of Roth IRAs, see Advisor’s Main Library Section 17.1 IRAs, SEPs and Simple Plans G—Roth IRAs
We invite your questions and comments by posting them in our blog AdvisorFYI, or by calling the Panel of Experts.
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Posted in Taxation, Wealth Management | Tagged: 401(k), 403(b), Barack Obama, Home, Individual Retirement Account, Personal Finance, Retirement, Roth IRA | 1 Comment »
Posted by William Byrnes on September 29, 2010
The Automatic IRA Act of 2010 (S. 3760) would require smaller employers to open automatically funded IRAs for their employees, a business opportunity for some advisors and a competitor for advisors to other retirement plans. In addition to its effect on advisors, the automatic IRA program may also benefit the insurance industry by allowing investment in insurance and annuity products, a blessing for insurers when life insurance coverage is at a fifty-year low.
For the complete analysis by our Experts Robert Bloink and William Byrnes, please read the article via your AdvisorFX subscription at The Automatic IRA Act of 2010: Boon for Advisors?
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Posted in Retirement Planning | Tagged: Annuity (US financial products), Business, Employment, Financial services, Individual Retirement Account, insurance, Investment, Pension | Leave a Comment »
William Byrnes' Tax, Wealth, and Risk Intelligence 