Timothy Sumer

IRS reminds those over age 72 to start withdrawals from IRAs and retirement plans to avoid penalties The Internal Revenue Service today reminded those who were born in 1950 or earlier that funds in their retirement plans and individual retirement arrangements face important upcoming deadlines for required minimum distributions to avoid penalties. Required minimum distributions, or RMDs, are minimum amounts that many retirement plan and IRA account owners must generally withdraw annually after they reach age 72. Account owners can delay taking their first RMD until April 1 following the later of the calendar year they reach age 72 or, in a workplace retirement plan, retire. RMDs are taxable income and may be subject to penalities if not timely taken. IRAs: The RMD rules require traditional IRA, and SEP, SARSEP, and SIMPLE IRA account holders to begin taking distributions at age 72, even if they're still working. Account holders reaching age 72 in 2022 must take their

Save for retirement now, get a tax credit later: Saver’s Credit higher limits can help low- and moderate-income workers save more in 2023 The Internal Revenue Service reminds low- and moderate-income workers that they can save for retirement now and possibly earn a special tax credit in 2022 and years ahead. The Retirement Savings Contributions Credit, also known as the Saver's Credit, helps offset part of the first $2,000 workers voluntarily contribute to Individual Retirement Arrangements, 401(k) plans and similar workplace retirement programs. The credit also helps any eligible person with a disability who is the designated beneficiary of an Achieving a Better Life Experience (ABLE) account, contribute to that account. For more information about ABLE accounts, see Publication 907, available on IRS.gov. The Saver's Credit is available in addition to any other tax savings that apply. Still time to take action Eligible workers still have time to make qualifying r

Important info for people considering making early withdraws from retirement funds COVID Tax Tip No matter how much people plan, unexpected events occur. Often, those events result in unplanned expenses. To cover these costs sometimes people, withdraw funds from their retirement savings early. While this may seem like an easy way to get cash quick, early withdrawals can come with heavy penalties and costly tax consequences. Here's some important info for people to consider before they dip into their hard-earned retirement savings. Workplace retirement plans: 401(k), 403(b) and 457(b) These plans can distribute benefits only when certain events occur. The plan's summary description should clearly state when a distribution can occur. It will also state if the plan allows hardship distributions, early withdrawals or loans. Hardship distributions are withdrawals from a participant's account made because of an immediate and heavy financial need and it's limited

Treasury and IRS expand program for approving certain retirement plans The Treasury Department and Internal Revenue Service today announced the expansion of one of their programs for approving retirement plans. The IRS will now allow 403(b) retirement plans, which are used by certain public schools, churches and charities, to use the same individually designed retirement plan determination letter program currently used by qualified retirement plans. Revenue Procedure 2022-40PDF details this expansion and includes other changes affecting individually designed retirement plans. Highlights of these changes: Revenue Procedure 2022-40 contains the following notable additions for 403(b) retirement plans: Expansion for initial plan determination – Beginning June 1, 2023, 403(b) retirement plan sponsors may submit determination letter applications for all initial individually designed retirement plans based on the sponsor's Employer Identification Numbers. (For further detai