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Speaker, author, teacher, consultant: I teach/consult to financial, tax, and legal professionals about the tax laws that govern IRAs and employer plans


New: Please download the Booklet on the new RMD regulations here


IRA Quick Reference Guides- Booklet - Downloadable PDF

Appleby’s IRA Quick Reference Guides provide summarized and simplified explanations of the rules that apply to IRAs and rollovers from employer plans, primarily in table format. This helps users to get information quickly and easily. While the guides do not provide detailed information, they address many of the most frequently asked questions, which allows the user to save time that would otherwise be spent on research.  . 

The Quick reference Guide Booklet (PDF) is available for $99. But, you get is as part of your IRA consulting membership. Download here(click to download).


Table of Contents

Contents

General Disclaimer and Copyright          a

About the Author           c

What’s New for 2024     1

          Quick Reference: Substantially Equally Periodic Payments/SEPP/72(t): Quick reference Guide   1

          IRA Beneficiary Options: Eligible Designated Beneficiary & Designated Beneficiary under the SECURE Act, as explained by the proposed RMD regulations that were published on February 24, 2022.           1

          IRS Notice 2023-53: IRS Waives Excise Tax for 2021 and 2022 RMDs for beneficiaries subject to the 10-year rule   2

          SECURE Act 2.0 Made Changes to RMD Age and Other IRA and employer plan rules        2

Reminders- Recent Changes to IRA Rules and Regulations         3

Changes made by the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act)    3

A Summary of the CARES Act’s Provisions for RMD Waivers, Coronavirus Related Distributions and Loans       5

IRS Form 1099-R and Form 5498 Changes        9

IRS Publishes New RMD Tables: These are effective 2022 and after    10

1.            Summary of Operational Procedures for Setting Up Your IRA            12

How to set up your IRA            12

Your Right to Revoke Your IRA              14

Funding Your IRA        14

2.            Checklist: Designating your beneficiary for your IRA  15

3.            2023 Limits for IRAs & Employer Plans           17

IRA and Salary Deferral Contribution limits if you are under age 50 as at year-end 2023            18

IRA and Salary Deferral Catch-up contribution if you are at least age 50 as at year-end 2023   18

2023 MAGI limits for deducting regular contributions to Traditional IRAs         19

2023 MAGI limits for making a regular contribution to a Roth IRA        20

2023 AGI limits for eligibility for saver’s credit: salary deferral and IRA/Roth IRA contributions             20

4.            Traditional IRA Features and Benefits: Quick Reference Guide    21

5.            Traditional IRA Funding Options: Quick Reference Guide      24

Regular Traditional IRA Contribution 24

Spousal Traditional IRA Contributions              25

Recharacterization of Contribution Made to Roth IRA               27

Deemed Traditional IRA Contribution               27

Payroll Deduction IRA               28

Employer-Sponsored IRA        28

Rollover from qualified plans [401(a) and 403(a)], 403(b) and governmental 457(b) plans [Not a Designated Roth Account (DRA)]            28

6.            Traditional IRA Deductibility: Quick Reference Guide 31

Eligibility to deduct regular Traditional IRA Contribution         31

Determination of “Who Is an Active participant” in an Employer Sponsored Plan         33

7.            Roth IRA Features and Benefits: Quick Reference Guide        35

8.            Roth IRA Funding Options: Quick Reference Guide    37

Regular Roth IRA Contribution             37

Spousal Roth IRA Contributions           39

Recharacterization of Contribution Made to Traditional IRA   39

Deemed Roth IRA Contribution            40

Payroll Deduction IRA               40

Employer-Sponsored IRA        40

Conversion from Traditional IRA, SEP IRA and SIMPLE IRA       41

Retirement plan rollovers from qualified plans [401(a) and 403(a)], 403(b) and governmental 457(b) plans [non-Roth]                42

Designated Roth Accounts (DRA) [Roth 401(k), Roth 403(b) and Roth Governmental 457(b)] Rollovers              44

Military Death Gratuities and Service Members’ Group Life Insurance (SGLI) Payments             45

9.            Roth IRA vs. Traditional IRA: Quick Reference Guide 46

Regular IRA Contribution Limits           46

Contribution eligibility            46

Deadline| Regular IRA Contribution  47

Eligibility to deduct contributions       47

Age Limitation             49

Saver’s Credit               49

Treatment of earnings             49

Distributions | Optional Vs. Required               50

10.          Saver’s Credit: Quick Reference Guide           51

Eligibility Requirements          51

Eligible Contributions               51

Credit Amount             52

Reduction of Eligible Contributions    53

11.          Checklist for Your Regular Traditional and Roth IRA Contribution      54

12.          The Transfer/Rollover Lingo: Recommend when communicating with financial institutions and plan trustees            57

13.          Rollover and Transfer Permissibility: Quick Reference Guide 60

Summary of rollover/transfer permitted between different type of accounts              61

Rollover and Transfer Limitations for IRAs and Employer Sponsored Plans: Quick Reference  63

14.          Rollover and Transfer Rules for Nonspouse Beneficiaries: Quick Reference  69

15.          Early Distribution Penalty Exceptions: Quick Reference Guide          72

Exceptions to the 10% Early Distribution Penalty ‘by Type of Account’               72

16.          Quick Reference: Substantially Equally Periodic Payments/SEPP/72(t): Quick reference Guide        75

SEPP Guidance            79

17.          Roth IRA Distribution: Tax and Penalty Treatment: Quick Reference  82

Quick Reference # 1: Amounts Subject Income Tax and/or the 10% Penalty    82

18.          Tax and Penalty Determination on Nonqualified Distribution from a Roth IRAs: Quick Reference      85

19.          Required Minimum Distributions         87

Accounts Subject to RMDs      87

RMD Start Dates for Various Birthdates and Ages       87

RMD Deadlines for Account Owners  88

RMDs and Portability: Summary          90

RMD Aggregation Rules           91

RMD Related Definitions        93

IRA RMD Calculation Formula               95

Uniform Lifetime Table: Effective 2022 and After        96

20.          IRA Beneficiary Distribution Options: When the IRA Owner Died on or before December 31, 2019    97

Traditional IRA Beneficiary Distribution Options          97

When the IRA Owner Dies before the Required Beginning Date (RBD)               98

When the IRA Owner Died on or after the Required Beginning Date (RBD)      99

Roth IRAs: Beneficiary Distribution Options   100

21.          IRA Beneficiary Distribution Options: When the IRA Owner Dies After December 31, 2019    101

New 10-Year Rule for Designated Beneficiaries            101

10-Year Rule for eligible Designated Beneficiaries      102

When the IRA owner Dies before 2020 and the beneficiary dies after 2019      102

IRA Beneficiary Options: under the SECURE Act            102

Beneficiary is an Eligible Designated Beneficiary: Spouse. The options are: -   102

If the IRA owner died before the RBD, the options are              102

If the IRA owner died on/after the RBD, the options are (N/A For Roth IRA)   102

A. Own account: Treat as own IRA or rollover to own IRA/other eligible retirement account  102

A. Own account: Treat as own IRA or rollover to own IRA/other eligible retirement account  102

Please note: Taking a distribution of the entire IRA balance at any time is always an option.  103

Beneficiary is an Eligible Designated Beneficiary: Nonspouse. The options are:             104

If the IRA owner died before the RBD, the options are              104

If the IRA owner died on/after the RBD, the options are (N/A For Roth IRA)   104

A. Beneficiary IRA: Life expectancy rule Distributions over the beneficiary’s nonrecalculated life expectancy, beginning 12/31 of the year that follows the year in which the IRA owner died.           104

If beneficiary is a minor child of the IRA owner, then the inherited IRA must be fully distributed by the end of the 10th year after the year in which the child reaches age 21 or dies, whichever is earlier.               104

If beneficiary is a minor child of the IRA owner, then the inherited IRA must be fully distributed by the end of the 10th year after the year in which the child reaches age 21 or dies, whichever is earlier 104

B. Beneficiary IRA: Simple 10-year rule             104

Please note: Taking a distribution of the entire IRA balance at any time is always an option.  104

Beneficiary is a Designated Beneficiary who is not an Eligible Designated Beneficiary. The options are: -          105

If the IRA owner died before the RBD, the options are              105

If the IRA owner died on/after the RBD, the options are (N/A For Roth IRA)   105

Beneficiary IRA: Simple 10-year rule  105

Beneficiary IRA: Simple 5-year rule.   105

Successor Beneficiary Options              106

Notes for Quick Reference Guides for Beneficiary Distributions            108

22.          Qualified Charitable Distributions        111

General Rules and Requirements for Qualified Charitable Distributions            111

QCD and RMDs            113

QCDs and Basis Amounts        115

QCDs and Deductible Traditional IRA Contributions: No Double Dipping for Tax-Free 117

23.          Tax Reporting Forms and Requirements for IRAs       119

IRS Form 1099-R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.,             119

IRS Form 5498, IRA Contribution Information 120

IRS Form 990-T, Exempt Organization Business Income Tax Return     120

IRS Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding             120

Form W-8CE, Notice of Expatriation and Waiver of Treaty Benefits     121

IRS Form 8606, Nondeductible IRAs   121

IRS Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts               122

IRS Form 8880, Credit for Qualified Retirement Savings Contributions 122

Appendix A. Life Expectancy Tables: Effective 2022 and After A

Single Life Expectancy-For Use by Beneficiaries: Effective for 2022 and after              A

Uniform Lifetime Table: For use by Unmarried Owners, Married Owners Whose Spouses Are Not More Than 10 Years Younger, and Married Owners Whose Spouses Are Not the Sole Beneficiaries of Their IRAs): Effective for 2022 and after        D

Appendix B: IRS’ Guide to Distribution Codes for IRS Form 1099-R, as provided to IRA Custodians/Trustees by the IRS.   E

Table 1. Guide to Distribution Codes             E

Appendix C: Transactions Reported on IRS Forms 1099-R and 5498      K

Recommended IRA Resources            L

SIMPLE, SEP, and SARSEP Answer Book         M

Roth IRA Answer Book  M

 

 

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