Here are ten details about excess IRA contributions and the correction process to aid you.

When you contribute to a traditional IRA or a pre-tax 401(k), you can get a tax deduction and deferral on any earnings in your account, but eventually, the government is going to want its share and will require funds to come out of these accounts.

In its proposed SECURE Act regulations, the IRS surprised everyone by saying that, in addition to the 10-year payout, annual RMDs are required in years of 1-9 of the 10-year period if the IRA owner had died on or after the date his RMDs were required to begin.

Contributing to an IRA may seem pretty straightforward, but there can be twists. Here are four rules that may surprise you when you make your 2023 IRA contribution.

SECURE 2.0 established a six-year SOL on the 6% excess IRA contribution penalty and a three-year SOL on penalties for missed required minimum distributions (RMDs).

The IRS has now said that rollovers done before April 15, 2024 can count as Roth IRA contributions for tax year 2023 if the 529 beneficiary has not already maxed out on his 2023 IRA contribution limit.

If you're a high earner, you may be able to get around the income limits by using the backdoor Roth IRA conversion strategy by making a nondeductible traditional IRA contribution and then converting those funds to a Roth IRA.

IRAs are an important, but often overlooked, part of your overall tax planning. As the deadline for filing 2023 tax returns approaches, it is a good time to incorporate your IRA plan strategies with your overall tax plan.

States are all over the map in their treatment of 529-to-Roth IRA rollovers. However, California stands alone as its residents who do a 529-to-IRA rollover will be subject to state income tax and an additional 2.5% California tax on earnings.

If you're asking, "what's the process when a trust is IRA beneficiary?", then this article will help you with some foundational considerations to cover when it comes to this confusing topic.

In no particular order, here is a handful of common IRA mistakes, along with the proper corrective measures.

Thinking about a 2023 SEP IRA contribution? Here are 6 rules to help you educate yourself and decide whether or not to continue with such a contribution.

Did you make a Roth IRA contribution for 2023? The deadline for making a prior year contribution is the tax-filing deadline, not including any extensions you might have. For 2023, that deadline is April 15, 2024.

Beginning in 2023, SECURE 2.0 allowed for employer contributions to be made to Roth accounts. But few plans have offered Roth employer contributions because of the need for recordkeepers to adjust their systems and because of the lack of IRS guidance.

The start of the new year is a good time for a refresher course on the contribution limits that apply when someone is in two different retirement plans at the same time or at different times within the same year.

A SECURE 2.0 change allows annuitized IRA annuities to be aggregated with non-annuity IRA funds for RMD purposes could reduce them. Without a proper valuation of the annuity from the insurance company, it will be difficult to take advantage of it.

If you have the means, a little can become a lot. It’s not about timING the market, it’s about time IN the market. If a teenager starts early, the long-term benefits could be astronomical.

If you are taking a distribution from your IRA at end of 2023 and considering a rollover that may not be completed until 2024, here are four facts you will want to know.

Despite the upheaval of the IRA beneficiary rules, the payout rules still apply when a non-designated beneficiary inherits an account. Read the details.

Since the 529-to-Roth rollover was not permitted until this year, it was anticipated that any nebulous language or confusion would be cleared up well before the 2024 calendar change. Well, it is a year later, and we have received no guidance from the IRS concerning 529-to-Roth-IRA rollovers.

What is the Backdoor Roth strategy? High-income earners - those over the Roth IRA income threshold can make non-deductible contributions to a traditional IRA and then convert the traditional IRA to a Roth, thereby circumventing the income limitations.

SIMPLE IRAs are designed to be administratively easier than 401(k) plans. However, the rules governing SIMPLE IRA plans are confusing. In some cases they are treated like IRAs, and in other cases they are treated like workplace plans.

The investment advisory firm of Bad Santa & the Grinch continues to disseminate misinformation and lousy, no good, rotten-to-the-core IRA advice. These two unsavory characters take great joy in fouling up not only your holiday, but also the qualified status of IRAs.

In 2024, more Americans than ever before will reach age 65. This demographic milestone has been called “Peak 65.” If you are in this group, what does Peak 65 mean for your IRA?

The end of the year is not far away. That means the deadline is near for taking a required minimum distribution (RMD). Here is what you need to know if you have your own IRA or if you are an IRA beneficiary.

The SECURE 2.0 Act contained over 90 sections and included numerous IRA and retirement account changes. Here is a list of 10 items from the Act scheduled to come on-line in 2024.

If you are charitably inclined and have an IRA, you might want to consider doing a Qualified Charitable Distribution (QCD) for 2023. The deadline for a 2023 QCD is fast approaching. It is December 31, 2023, but many custodians have even earlier cutoffs.

The limit on annual contributions to an IRA is increased to $7,000 for 2024, up from $6,500 in 2023. The IRA catch up contribution limit for individuals aged 50 and over was changed to now include a COLA under the SECURE 2.0 but remains $1,000 for 2024.

When taking a distribution from a Roth IRA, this is the order in which the dollars come out, 1 through 3. You cannot access your converted dollars until the contributions have been depleted, and you cannot access any earnings until both the contributions and conversions are gone.

An advisor called and said his 75-year-old client had just passed away. He had questions about the payout rules applicable to the three IRAs the client left behind: a traditional IRA, a Roth IRA, and an inherited IRA from his sister.

If you have a traditional IRA (or a SEP or SIMPLE IRA) and you are age 73 or older during 2023, you must take an RMD by December 31, 2023. But what if your IRA is entirely illiquid? There are some possible solutions.

When it comes to our retirement accounts, we frequently complain about the negatives, such as the many IRA rules that are way too complicated and confusing. Let's change it up and take a few moments to give thanks for those IRA rules that work well and help us save for our families’ futures.

The confusion about the Roth IRA distribution rules isn’t really surprising since there’s actually two clocks, each used for different purposes and each with different rules.

If the Grinch and Bad Santa both passed their FINRA Series 7 exam and decided to open an investment advisory firm, I’m pretty sure they would combine forces to intentionally deliver some of the WORST financial advice possible.

Section 327 changes the distribution rules for spouse beneficiaries of IRA (and workplace plan) account holders and is effective January 1, 2024. The result is that some of these beneficiaries will actually be in a worse position than they are in under the current rules.

Roth IRA distributions can consist of contributions, converted funds and earnings – or any combination of the three. To determine the distribution, you must use “ordering rules” which dictate the order in which these categories of Roth IRA money must be withdrawn.

The once-per-year IRA rollover rule sounds pretty easy to understand. You may only do one IRA-to-IRA (or Roth IRA-to-Roth IRA rollover) per year (365 days). However, this rule is often misunderstood.

You may not be familiar with the tax code’s “same-property rule” that applies to IRA-to-IRA (and Roth IRA-to-Roth IRA) rollovers. The rule requires that the property received in an IRA distribution must be the same property that is rolled over. Violating the same-property rule results in an IRA distribution becoming ineligible for rollover and therefore taxable.

Did you inherit an IRA from someone who is NOT your spouse? If this is your situation, proceed with caution! For non-spouse beneficiaries, a wrong move can result in disastrous consequences.

A QCD is a distribution from an IRA that goes directly to a qualifying charity and is not included in the taxable income of the IRA owner. A QCD cannot be made from an employer plan. A QCD can be up to $100,000 a year, per individual.

An estate can become the beneficiary of a person’s IRA in a couple of ways. First, the estate could be named outright as the beneficiary on the beneficiary form. Another way an estate can become the beneficiary of an IRA is if no beneficiary is named at all.

Taxpayers naturally seek to use benefits offered in the Internal Revenue Code. Sometimes, though, Code provisions offset each other, reducing the expected tax savings. Fortunately, savvy planning can help seniors receive the best of both worlds.

Traditional IRA owners are subject to RMDs beginning in the year in which they turn age 72. The RMD age used to be 70½, but the SECURE Act raised the age to 72 for anyone who turned 70½ in 2020 or later.

Maybe you made a Roth IRA contribution for 2022 and then discovered your income was too high. You’d rather contribute to a Roth IRA or maybe not contribute at all. You can fix these issues by correcting your 2022 IRA contribution by the upcoming October 16, 2023, deadline.

The IRS delays roth catch up: The IRS delayed the effective date of the SECURE 2.0 rule requiring catch-up contributions by higher-paid older employees to be made on a Roth basis.

When do Required Minimum Distributions have to be taken? Is waiting until April 1 of the following year to take my first RMD a bad idea? We have answers.

The IRS gives employer plans two more years to comply with the controversial SECURE 2.0 rule requiring “catch-up contributions” for high-paid employees to be made on a Roth basis. The effective date of the rule has been postponed from January 1, 2024 to January 1, 2026.

Many IRA assets will ultimately go to non-spouse beneficiaries. When these beneficiaries inherit the funds, special rules kick in. Inherited IRAs are not like your own personal IRA account. Here are seven rules for inherited IRAs that may surprise you if you are a non-spouse beneficiary.

The Ed Slott team answers thousands of IRA and work plan questions annually. Here are 10 IRA and work plan topics that you may have stumbled across yourself.

If you are thinking of buying an NFT (non-fungible token) with your IRA funds, you may want to reconsider. In Notice 2023-27, the IRS said that NFTs associated with “collectibles” are prohibited IRA investments. This could expose you to significant taxes and penalties.

The lunacy of IRA beneficiary payout rules continues to boggle the mind. As I guide advisors through the options available to their clients, various nuances present one unique scenario after another. Did the original IRA owner pass away before or after the establishment of the SECURE Act? How old was the person when they died? Who was the beneficiary? Is this a successor beneficiary situation? Ultimately, by following the individual fact patterns, definitive answers materialize.

Rollovers from work plans like a 401(k) to an IRA are as common as air travel. Typically, pre-tax dollars are moved into a traditional IRA, and any Roth dollars in the work plan are rolled to a Roth IRA.

When an IRA or retirement plan owner reaches a particular age, that account owner typically must begin taking required minimum distributions. Of course, there is a parade of variables to consider.

If you are subject to required minimum distributions (RMDs) and have annuitized part of your IRA, a recent law change could drastically reduce your RMDs. But, without IRS guidance, it may be difficult to take advantage of that change.

When a contribution is not permitted in an IRA, it is an excess contribution and needs to be fixed. Some excess contributions are pretty easy to understand. Others are a little more complicated. Here are 5 ways an excess IRA contribution can happen.

If the original IRA owner named contingent beneficiaries on the beneficiary form, those names are null and void if the primary beneficiary is still alive when the owner dies. Assuming the primary beneficiary does not disclaim any portion of the IRA, the names on the contingent line become meaningless. The moment an IRA owner dies, the primary beneficiary is immediately deemed to be the new owner of those assets.

Rolling over to an IRA can offer many advantages, but everyone’s situation is different. Think carefully and weigh your options.

If you created your trust before 2018, and named your trust as the beneficiary of your IRA, you NEED to review it now. What was a perfectly effective planning strategy a couple of years ago could be totally useless now.

What are the tax consequences when a Roth IRA is split in divorce? It is our (Ed Slott's team's) opinion that the inherited IRA should continue using the original beneficiary’s single life expectancy (the son’s).

Another option is to keep your funds in the plan. Keep in mind, though, this may not always be possible. With that in mind, here’s several reasons why you may want to keep your plan funds where they are.

Whether it is making smoothies, serving tables, or being a camp counselor, a summer job can teach life skills and give a first opportunity to manage finances. An important part of managing finances is saving for the future.

If you inherited an IRA between 2020 - 2023, your RMD (Required Minimum Distribution) penalty may be waived by IRS Notice 2023-54.

As already-complicated IRA rules spiral further into an abyss of confusion, it comes as no surprise that irregularities exist. Here are three such random anomalies and exceptions baked into the “arbitrary” lines of the tax code.

Beginning in 2024, SECURE 2.0 requires that certain high-paid 401(k) participants who want to make catch-ups must make them on a Roth basis. This means that the contributions will be made on after-tax pay, but the contributions and associated earnings can be distributed tax free if certain conditions are met.

Owners of Roth IRAs are never required to take lifetime RMDs from their Roth IRA. Since lifetime RMDs are not applicable to Roth IRAs, all Roth IRA owners are deemed to have died before the RBD. Even if a Roth IRA owner died at age 100, he would be deemed to have died before his RBD.

I thought about what might qualify as poison-ivy equivalents for IRAs. What transactions or situations present themselves as non-life-threatening nuisances that must be dealt with? Here are 4 pain-in-the-tail IRA annoyances.

Do you have an IRA you are thinking about converting to a Roth IRA? Inheriting a traditional IRA will have very different tax consequences than inheriting a Roth IRA. Converting your IRA to a Roth IRA is really a gift to your beneficiaries.

There are numerous articles referring to “eligible designated beneficiaries” (EDBs), “non-eligible designated beneficiaries” (NEDBs), and “non-designated beneficiaries” (NDBs). As a basic refresher, the three SECURE Act IRA beneficiary categories (and their applicable payout rules), are as follows.

The rule is often explained by saying that you can’t do more than one IRA-to-IRA (or Roth IRA-to-Roth IRA) rollover in any one-year (365-day) period. That’s an easy way of describing it, but it’s not always accurate. A better explanation is to say you can’t do a rollover of an IRA distribution made within one year of a prior distribution that you rolled over.

In Notice 2023-43, the IRS said that self-correction for IRAs can’t be used until the IRS issues rules for the new program. And those rules aren’t required to be issued until the end of December 2024.

The biggest advantage that a spouse beneficiary of an IRA has over other beneficiaries is the ability to do a spousal rollover. With this, inherited retirement account funds become the spouse beneficiary’s own.

This requirement of annual RMDs when an account owner dies on or after the RBD stems from a rule sometimes called the “at least as rapidly” (ALAR) rule. While the ALAR rule does not require the same amount that was taken by the IRA owner to also be taken by the beneficiary, it does require that the process of taking RMDs continue.

Naming a minor as a beneficiary isn't as simple as naming an adult. It involves naming a guardian as well as possibly naming a custodial account. Read on to see all the details.

SECURE 2.0 has changed the way that employer contributed accounts are maintained. Read more to see how.

Roth IRA distributions have changed by SECURE 2.0. Read what those changes are.

Under SECURE 2.0, RMDs have changed in certain ways that are critical for you to understand.

This article has questions about once-per-year rollovers and RMDs for inherited IRAs.

When it comes to rollovers from 529 plans to Roth IRAs, there are new regulations when it comes to SECURE 2.0.

RMDs and how they function have been altered as SECURE 2.0 has taken affect. Read to see how in this article.

This article contains questions asked by members of Ed Slott's community that are answered by members of his staff.

SECURE 2.0 brings changes to RMDs in regards to Roth IRAs. Read how in this article.

When it comes to contributing to an IRA, it's important to understand all the details involving your spouse's ability to contribute.

The contribution limit changed for 2022 and might change again in 2023. Read what these changes are.

Questions about RMDs and SIMPLE IRAs are answered by Ed Slott's team in this brief article.

It's important to understand all the rules associated with distributions from your IRAs.

Choosing a financial advisor in California? Ask these 10 questions to ensure expertise in IRA distribution planning. Make informed decisions about the future!

Many contribution limits have been increased for 2023. Read this article to find out all the details regarding these changes.

When considering limits in your retirement plan, it can often get confusing to understand how they operate. This article clears the air on this subject.

Your employer may offer you a Roth 403(b) plan. Before you start contributing, it’s important to understand where your money’s going and the tax implications this type of account will have on you now and into retirement.

Roth IRAs are already popular, and with new SECURE Act regulations, they have even more advantages. Read what those are!

IRA deadlines are coming to an end as the year closes out. Make sure you are on top of all these to secure yourself for a successful 2023.

SECURE 2.0 is designed to increase savings in IRAs and company plans for retirement planners and savers.

Like a traditional IRA or 401(k), a 414(h) plan lets you save money for your retirement while also providing you with some tax benefits.

Under new regulations, if the original IRA owner died on or after his required beginning date (when lifetime RMDs begin), then any subsequent 10-year period for a beneficiary or successor beneficiary will require RMDs within the 10-year window.

Whatever your reason for giving this year, it’s important to know how your charitable contributions can impact your financial plan. In fact, being strategic and intentional in your charitable contributions can create tax benefits for both you and your chosen charity.

The pro-rata rule involves the taxation of an IRA distribution when an IRA owner has an IRA with after-tax amounts in it.

While there are many tricky aspects to financial planning and retirement funding, here are some that are straightforward and greatly beneficial.

The IRS has released record high contribution increase for 2023. This article details the changes.

Each pension plan has their pros and cons, which one is right for your situation? Find out here.

From tips on excess IRA contributions to IRA rollovers, this article includes the major topics focused on at the most recent Ed Slott conference.

There are a few IRA transactions that are easily missed, which this article will explain in detail.

With all the incredible benefits that come with Roth IRAs, it's no wonder more and more people are converting to it.

If you are wanting to convert your IRA during this year, now is the time to do so or you won't be able to again.

Fitting different conversions into Traditional and Roth IRA buckets is the way for the IRS to know which is which.

There is an exception to the 10% early withdrawal penalty from your IRA if you are a first-time home buyer. Read more about it here!

When rolling over from IRAs to other IRAs or Roths, it's important to understand the rules, especially the same property rule.

When a person is named the beneficiary from an inherited IRA, they have five years to empty that IRA. Learn more about this concept here.

The 50% penalty on missed RMDs in 2021 and 2002 have just been waived. What does this mean for your IRA?

October 17th is coming up quickly! Have you made sure recently that you have no excess IRA contributions? If not, now is the time to check, as well as fix it if you have not yet.

Roth IRAs are an incredible way to build tax-free money for retirement, and now more 401(k) plans offer Roth contributions. Find out how to withdraw from these without penalty.

Inheriting an IRA is a big responsibility, so understanding the rules and applications for such an item is critical.

It's not just once a year that you should be reviewing your IRA, but several times to check for important updates.

This article, cited from Ed Slott and Company, LLC, explains the ordering rules for Roth IRAs.

Mega backdoor Roth IRAs are complicated retirement savings strategies. But for the right person, they could offer a big tax advantage.

Catch-up contributions can be a great way to make up for lost time when it comes to retirement savings. Are you eligible?

If you’re experiencing financial hardship or emergency, knowing the rules of the road for penalty-free retirement plan withdrawals is important.

Moreover, legislation passed in 2020 allows tax deductions up to 100% of adjusted gross income (AGI) for cash contributions, this year only. Normally, such deductions are capped at 60% of AGI.

Required minimum distributions (RMDs) from retirement accounts were suspended in 2020, as part of the federal government’s effort to keep the economy afloat despite medical and financial turmoil. Now they’re back, so most people who are 72 or older in 2021 will have to take at least as much as IRS tables dictate from their retirement accounts this year, and pay the resulting tax. Many IRA owners delay RMDs until yearend, but there are good reasons to act sooner rather than later.

Now that required minimum distributions from retirement accounts are back for 2021 after being waived in 2020, you should look before you leap if you’ll owe RMDs this year. I’ll outline three commonly overlooked strategies by many retirement advisors, investment advisors, and financial consultants alike, that are good for you to at least know about especially if you own a large IRA. Note that this recommendation applies not only to most account owners who are 72 or older in 2021 but also to retirement account beneficiaries subject to RMDs.

Apple, Tesla & McCormick all have one thing in common – they announced stock splits this year. Should you take advantage of these more affordable shares? Here are 3 things consider, plus if you should own shares within Non-IRA, IRA, or Roth IRA.