AAFCPAs and AAF Wealth Management would like to make clients aware that the IRS has issued penalty relief in 2023 for individuals who have not carried forward required minimum distributions (RMDs) on inherited retirement accounts. This guidance applies only to...
AAFCPAs and AAF Wealth Management would like to make clients aware that the IRS has issued penalty relief in 2023 for individuals who have not carried forward required minimum distributions (RMDs) on inherited retirement accounts. This guidance applies only to accounts inherited by non-spouse heirs where the decedent had been taking RMDs.
Confusion arose in 2019 when Congress mandated that taxpayers other than spouses inheriting accounts would need to withdraw all IRA funds within 10 years of inheritance as opposed to spanning distributions over their lifetimes. However, they did not immediately clarify what would happen if RMDs had already been started in these accounts. The IRS has since released guidance in the middle of 2022 alerting taxpayers to the fact that distributions must be continued on these inherited IRAs and that you could not wait until year 10 to do so. However, they’ve allowed penalty relief through 2023.
If you have any questions, please contact Daniel Seaman, CPA, Tax Partner at 774.512.4025 or dseaman@aafcpa.com or your AAFCPAs tax advisor.
*AAF Wealth Management is a Registered Investment Adviser. Advisory services are only offered to clients or prospective clients where AAF Wealth Management and its representatives are properly licensed or exempt from licensure. This blog is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by AAF Wealth Management unless a client service agreement is in place.
Author Bio
More Articles
Digital sales, software, inventory, and multistate operations can expand a company’s state tax footprint. Understanding where obligations arise can help businesses manage exposure and plan...
In cannabis transactions, key details may carry over after the deal closes. Understand how prior tax filings, Section 280E, and deal structure can shape a...
From the monthly close to internal controls and board reporting, strong financial management depends on a series of interconnected practices. AAFCPAs’ David Kelleher and Lauren...
