IRA Distributions and RMDs: Minimizing Taxes and Meeting SECURE 2.0 Requirements

Significant changes were made by SECURE 2.0 to individual retirement accounts (IRAs) and RMDs. The beginning date for required withdrawals was raised to age 73 for individuals with birthdates on Dec. 31, 1959, or before, and age 75 for those with birthdates after this date. The SECURE Act requires non-spousal beneficiaries to withdraw IRA assets inherited after Dec. 31, 2019, within 10 years of the IRA owner's death. Only "eligible designated beneficiaries" are eligible to withdraw IRAs over their life expectancy.

As always, failure to take an RMD carries stiff penalties: 50 percent for missed RMDs in years 2022 and prior. SECURE 2.0 reduces this excise tax to 25 percent beginning in 2023 and even lower, to 10 percent, if timely corrected. A taxpayer must file Form 5329 to begin the tolling of the statute on these penalties. Taxpayers who neglect to take their RMDs would not be aware of the obligation to file Form 5329, consequently allowing the IRS to assess this excise tax indefinitely. The IRS has offered some relief. Recently released Notice 2022-53 states the IRS will not impose the excise tax on beneficiaries subject to the new 10-year payout and who failed to take required distributions in 2021 and 2022. Understanding when distributions must be made from IRAs is critical for tax advisers and taxpayers participating in these plans.

Listen as our panel of tax strategists discusses methods to reduce tax in light of recent changes and avoid penalties and excise tax on these distributions.

1. IRAs and RMDs: an introduction
2. SECURE 2.0
3. IRAs
   1. New rules for inherited IRAs
   2. Penalty-free withdrawals
   3. Comparison to other qualified plans
4. RMDs
   1. Beginning dates
   2. How beneficiary RMDs are determined
   3. Resolving missed RMDs
      1. IRS Notice 2022-53
      2. Requesting a waiver, Form 5329
5. Minimizing taxes paid on distributions
   1. Bracket topping
   2. Roth IRAs
   3. Trusts
   4. Charitable contributions
   5. Other strategies

The panel will review these and other critical issues:

• New IRA distribution rules for beneficiaries following the SECURE Act
• Using charitable contributions to minimize tax on retirement account distributions
• Distribution rules for IRAs vs. other qualified plans
• Rectifying missed RMDs

Learning Objectives

After completing this course, you will be able to:

• Identify steps that can potentially eliminate excise tax on missed RMDs
• Determine methods to minimize tax paid on IRAt distributions
• Decide at what age a taxpayer is required to take distributions from an IRA
• Ascertain changes made to inherited IRA distributions by SECURE 2.0

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of individual income taxation, including itemized deductions, individual income tax credits, net operating loss limitations including carrybacks and carryforwards.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).