The Slott Report

Each day we receive dozens of retirement-related questions from advisor members of the Ed Slott Elite IRA Advisor Group. Conversations range from incredibly complex to obscure to, “I just need you to confirm what I was thinking.” Whether a long explanation is required or a quick comment, our members have our undivided attention. We take every question seriously and proactively fill in any information gaps. Here is a random sampling of some recent communications:

It is a Thanksgiving tradition here at the Slott Report to take a moment to give thanks for the IRA rules that are helpful to retirement savers. We know there are many times the rules governing retirement accounts can be tricky. They often seem illogical, confusing, and may be even unfair. However, there are others that work well and give us the tools we need to save for a secure retirement – and may be even get a few tax breaks along the way.

A solo 401(k) plan is a great retirement savings vehicle for self-employed business owners with no employees (other than their spouse). But if you’re considering a new solo 401(k), be aware that there’s a December 31, 2022 deadline to open up the plan if you want to make 2022 elective deferrals.

A solo 401(k) plan is a great retirement savings vehicle for self-employed business owners with no employees (other than their spouse). But if you’re considering a new solo 401(k), be aware that there’s a December 31, 2022 deadline to open up the plan if you want to make 2022 elective deferrals.

Question: Hello! I need clarification regarding RMD statements for customers who hold inherited IRAs or inherited Roth IRAs. I have not been able to find a clear answer to the following question: Is the custodian required to provide an RMD statement to owners of inherited IRAs (or inherited Roth IRAs)? Thank you!

The goal of the net unrealized appreciation (NUA) tax strategy is to enable a person to pay taxes on the appreciation of company stock formerly in a work plan at long term capital gain rates as opposed to ordinary income rates. The spread between long term capital gains vs. ordinary income could result in a sizable tax savings for those eligible for the strategy. However, not everyone can participate, and for those who are candidates for NUA, there are potential stumbling blocks along the way.

The holidays are right around the corner, and 2022 is drawing to a close. The end of the year is always a busy time with retirement account deadlines and preparations for the arrival of a new year and the tax season. This year, it seems, has been even busier than usual for us. Here are four things we are talking about at the Slott Report during the final few months of 2022.

Question: Good morning, I have a client who took out $100K from his SEP IRA and put the funds back in on 8/19/22 -- within 60 days from the distribution. The client has now called me and asked if he can take the same $100K out and move it to his Roth IRA and pay taxes on it. Is he allowed to do this, or do we have to wait until 2023 to do the conversion?

As we’ve reported, the IRS recently said it would waive the 50% penalty on RMDs missed in 2021 and 2022 for IRA beneficiaries subject to the 10-year payout rule who inherited in 2020 or 2021. These waivers were announced in IRS Notice 2022-53. Although the Notice is not clear, it appears that beneficiaries are not required to take RMDs for years that the penalty waiver applies to. However, as things stand now, the grace period will end in 2023.

Not every IRA transaction is easily identifiable. Some require a little legwork to reveal or report what occurred. Some transactions are not even labeled on official IRS tax forms and can go undetected. Here are three items that taxpayers and tax professionals alike can easily miss.