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It’s important for clients to follow the rules in taking required minimum distributions from retirement accounts or they will face steep penalties from the IRS. Regular distributions are generally required from retirement accounts such as IRAs and 401(k)s beginning no later than April 1 following the year the client reaches age 70-1/2 (some participants in
Already, some high profile estates drew attention this year to the fact that, for the first time since 1915, there is no federal estate tax. While the suspension of the estate tax may serve as a temporary benefit for heirs, it could also cause complications for investors who have included trusts in their estate planning.
For some clients, required minimum distributions are simply that: a requirement. Many wealthy clients may not rely on these funds to cover expenses in retirement, and the money only serves to increase their taxable income for the year. But clients may put this money to work for them in a tax–free way and at the
This year marked an unusual year for the estate tax. In fact, for the first time since 1915 the country does not have a federal estate tax because the tax was removed temporarily in 2010 as part of the 2001 tax law. But, the suspension of the tax was designed to be a temporary one,
On September 29, 2010, the U.S. House of Representatives passed the Regulated Investment Company Modernization Act of 2010 (H.R. 4337), a bill designed to update the tax laws governing mutual funds. The bipartisan bill has moved to the Senate where it is expected to pass without opposition, and may be voted on during the lame-duck
The IRS estimates there are more than 20 million sole proprietors in the United States, and some business owners may not be aware that they can realize immediate tax benefits by setting up an Individual 401(k) plan. As the year-end approaches, it can be an opportune time to discuss setting up an Individual 401(k), which
The Alternative Minimum Tax (AMT) will affect an additional 27 million taxpayers in 2010 if Congress fails to act and amend the income guidelines by the end of the year. Asking your clients if they have consulted with a tax preparer about the possible impact of the AMT provides an opportunity for you to discuss
When discussing a possible Roth IRA conversion with clients, typically the primary barrier is identifying funds to pay the tax bill. Clients understand the benefits that a tax–free Roth can provide in retirement and to potential heirs, but are challenged by reporting additional income generated from a conversion. Using business–related tax losses to offset a
Many investors have at least one major concern about retirement: running out of money. And rightly so, according to a recent study by the Employee Benefit Research Institute that found that nearly half of early baby boomers are at risk of running short of money in retirement. Talking about retirement income with clients can help
This is not only a great way to help your clients avoid potential mistakes, but also to uncover other retirement accounts for consolidation. Approximately $1 trillion held within employer retirement plans is eligible for rollover into an IRA. This represents roughly 25% of all retirement plan assets. Discussing beneficiaries with clients can help spur them