Description
As individuals age, Traditional, SEP, and SIMPLE IRA holders encounter Required Minimum Distributions (RMDs), mandatory distributions starting at age 73. Failure to comply incurs an "Excess Accumulation Penalty," addressable through IRS Form 5329. Exceptions can absolve or diminish the penalty if a valid cause for non-distribution exists.
The CE Tax course elucidates the RMD deadline and its postponement, known as the "Required Beginning Date," offering resources for accurate calculation. Financial institutions are mandated to issue RMD reminder notices by January 31st of the distribution year. Accurate calculations involving prior year-end IRA balances and special rules for spouses with significant age differences are explored to minimize RMDs.
The discussion extends to divorce, beneficiary death effects, satisfying RMDs from other IRAs, and the taxable nature of distributions. Participants will grasp the intricacies of RMD calculations, penalties for non-distribution, IRS procedures for penalty waivers, and reporting distributions on tax returns.
Major Pointers:
RMD calculation intricacies
Penalty implications for non-distribution
The application process for penalty waiver
Reporting procedures for RMDs on tax returns
Learning Objectives
To analyze the calculation intricacies of Required Minimum Distributions (RMDs).
To discuss and explore the penalties associated with failure to distribute RMDs.
To explain how to apply for penalty waivers and utilise relevant IRS forms for penalty resolution.
To inspect reporting RMDs on an individual's tax return.
To analyze the impact of various life events on RMD requirements and distributions.