Surgent's Top 20 Effective Strategies for Avoiding RMD Mistakes and Penalties

Overview

Required minimum distributions (RMDs) must begin for the year in which the account owner reaches age 72 (older if they were born after 1950). RMDs must also be taken from inherited accounts, and the process for determining RMDs for these accounts is more complex than those that apply to RMDs for non-inherited accounts. Failure to comply with the RMD rules will result in the account owner owing the IRS an excess accumulation penalty on any RMD shortfall. Interested parties must understand the compliance requirements that apply to RMDs to be able to assist in ensuring that penalties are avoided. Additionally, the recent changes that affect RMDs must be considered when advising clients about their RMD obligations.

Highlights

• How to determine when an individual is subject to an RMD
• Coverage of RMD changes under SECURE Act 2.0
• What is the required minimum distribution for an account owner?
• What is the required minimum distribution for a beneficiary IRA?
• Key explanations of RMD regulations
• The types of accounts that are subject to the RMD rules
• The parties that are subject to the RMD rules
• Exceptions and special considerations for RMDs
• Rollover and transfer rules in an RMD year
• The various responsibilities of interested parties
• Qualified charitable distributions and how they are coordinated with RMDs and IRA contributions
• How the 10-year rule works for beneficiaries

Prerequisites

None

Designed For

All practitioners advising clients on these complex issues

Objectives

• Identify individuals who must take RMDs.
• Explain the RMD rules for account owners and beneficiaries
• Describe how RMDs and QCDs can be coordinated
• Handle the excise tax that applies when an RMD is not taken by the applicable deadline

Preparation

None