Question:
Good Morning,
We have a client that passed away in November of 2019 at the age of 85. Her beneficiaries would be required to take their RMD in 2020. Are they eligible under the CARES Act to forgo that RMD for this year?
Thank you,
Linda
Roth IRAs are a wonderful way to save for retirement. A person can sock away $6,000 a year (plus another $1,000 if they are age 50 or older) and the earnings will grow tax free. Plus, most custodians allow Roth IRA dollars to be invested in an incredibly wide array of options – mutual funds, stocks, ETFs - a veritable smorgasbords of choices. Can’t beat that with a stick!
Did I mention that Roth IRAs have no required minimum distributions at age 70 ½? (Put that in the “pro-Roth” column.) What about age restrictions on who can contribute? You’re telling me that anyone can contribute to a Roth IRA as long as they have earned income and do not exceed certain income limits?
Did you convert your traditional IRA to a Roth IRA in 2016 and now you are reconsidering that move? Did you make a 2016 traditional IRA contribution and later discover the contribution was not deductible? Did you contribute to a Roth IRA, not knowing that your income was above the limits for eligibility? If you answered, “yes” to any of these questions, there is a deadline rapidly approaching that you will want to know about. That is the October 16, 2017 deadline for recharacterizing 2016 conversions and IRA contributions. Here are 8 things you need to know about recharacterization.
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A common strategy is to go through with smaller Roth IRA conversions or to convert different assets to different Roth IRAs. If you have done this over a number of years, you probably have more Roth IRAs than you know what to do with. Maybe it is time to consolidate. Here's why.
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You converted your traditional IRA to a Roth IRA. Then, you recharacterized those Roth IRA funds back to a traditional IRA. You are not alone. Many taxpayers recharacterize Roth IRA conversions. This is especially common in times of market volatility. For many taxpayers, a recharacterization makes sense when faced with a Roth IRA that declined in value since the conversion. Why pay a tax bill on value that no longer exists? After the recharacterizion, you may be wondering... what next? Here are some things you need to know.
