Thinking about a 2023 SEP IRA Contribution? Here Are 6 Rules You Need to Know
Are you thinking about making a Simplified Employee Pension (SEP) IRA plan contribution for 2023? If so, here are 6 rules you need to know.
SEP
SECURE 2.0 RELAXS RETROACTIVE SOLO 401(k) RULES
Thinking of opening up a new solo 401(k) plan for 2023? Thanks to SECURE 2.0, you don’t have to rush to get it done by year end.
A solo 401(k) is an excellent retirement savings vehicle for self-employed business owners with no employees (other than their spouse). That’s because the IRS says that a business owner with a solo (k) actually wears two hats – one as an employee and one as an employer. As an employee, he can make elective deferrals up to $22,500 for 2023, or $30,000 if age 50 or older.
Time is Running Out for 2023 QCDs
If you are charitably inclined and have an IRA, you might want to consider doing a Qualified Charitable Distribution (QCD) for 2023. The deadline for a 2023 QCD is fast approaching. It is December 31, 2023, but many custodians have even earlier cutoffs. Don’t miss out on this valuable tax break. Here is what you need to know.
Bad Santa & The Grinch Offer Horrible IRA Advice – Part 2
The investment advisory firm of Bad Santa & the Grinch continues to disseminate misinformation and lousy, no good, rotten-to-the-core IRA advice. As we saw in “Bad Santa & The Grinch Offer Horrible IRA Advice – Part 1” (Slott Report, November 29), these two unsavory characters take great joy in fouling up not only your holiday, but also the qualified status of IRAs. Here are more fish bones, brown banana peels, coffee grinds and raccoon meals from their dented trash can of “IRA assistance.”
Congress Makes SIMPLE IRA Plans Less SIMPLE
SIMPLE IRA plans are a popular retirement savings option for small businesses. The plans are available for companies with 100 or fewer employees who received at least $5,000 in pay from the company in the prior year.
SIMPLE IRAs are designed to be administratively easier than 401(k) plans. Businesses can establish a SIMPLE by completing a model IRS form (either Form 5305-SIMPLE or 5304 SIMPLE) and can make contributions directly to employees’ IRAs.
SECURE 2.0 Allows QCDs to CGAs
SECURE 2.0 expands qualified charitable distributions (QCDs) by allowing a one-time only QCD of up to $50,000 to a split-interest entity. As a result of this new rule, there is now a great opportunity to fund a charitable gift annuity (CGA) with a QCD.
Inherited IRAs and Roth Conversions: Today’s Slott Report Mailbag
Question:
I inherited an IRA in 2022 upon the passing of my father after he had already started his RMDs. I took a 2023 RMD from it in May 2023. Your website says I’m not required to take this RMD. I called the custodian to reverse it, but they said it can’t be done. Is this true?
Mandatory Roth Catch-up Contributions Required for 2024
One of the more controversial provisions of the new SECURE 2.0 law concerns 401(k) catch-up contributions.
Most 401(k) plans – as well as 403(b) and governmental 457(b) plans – permit employees who are age 50 or older to make catch-up contributions. The limit for catch-ups in 2023 is $7,500, allowing for total elective deferrals of up to $30,000.
3 Tips to Avoid Tax Problems with Your SEP
A Simplified Employee Pension (SEP) is a popular choice for many small employers. Although these plans are in fact designed to be less complex than other types of retirement plans, there are many ways to go wrong and make errors. Here are three tips to avoid tax problems with your SEP.
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