Tax Warrior Chronicles

IRS Expands the Definition of Coronavirus-Related Distributions

Posted on Wed, Jul 22, 2020

The Treasury Department offered easier access to retirement savings in March 2020 as the economic hardships resulting from the COVID-19 pandemic became a forgone conclusion.  Three months later, The IRS has expanded eligibility for coronavirus related distributions and provided further insight into how these new rules should be applied in Notice 2020-50.


Certain provisions in the CARES Act were enacted to reduce the tax burden on withdrawals from certain qualified retirement plans. If a withdrawal is considered a “coronavirus-related” distribution, the CARES Act extended the time to pay the resulting taxes or to recontribute the distributions back to the qualified plan, while widening

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IRS Grants Extensive Relief to 2020 RMD Recipients

Posted on Mon, Jun 29, 2020

If you received a Required Minimum Distribution (RMD) in 2020, you should take careful note of guidance contained in the recently issued IRS Notice 2020-51 regarding the CARES Act’s waiver of 2020 RMDs and a taxpayer’s ability to rollover such distributions.


Prior to the CARES Act, distributions eligible to be rolled over to a retirement plan (including an IRA) within 60 days from the date of receipt, excluded:

  • Required Minimum Distributions (RMDs),
  • Distributions that were part of a series of substantially equal period payments made over a specified period, and
  • Distributions made on account of a hardship experienced by an employee.

Other exclusions form eligible distributions for the

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GUEST BLOG - Are Most of Your Retirement Eggs in the Same Tax Basket?

Posted on Wed, Feb 12, 2020

By: Jeremy Gussick, MBA, CFP


As the busy tax season gets into swing, we like to tap friends in the financial planning world to help our clients and subscribers with their planning. Jeremy Gussick of LPL Financial is no stranger to our subscribers.  Today, he talks about taking distributions from various types of retirement accounts in the most tax-efficient manner.


Did you know that the vast majority of assets currently saved for retirement in this country are all in the same tax-structured account type?  And by saving in this fashion, you may be placing some significant limitations on your ability to grow and distribute your assets during retirement in the most tax-efficient manner? 

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The SECURE Act - Significant Changes for IRAs and 401(k)s – Part II

Posted on Fri, Jan 03, 2020

By: Beth Gaasbeck, CPA, MBA and Robert N. Polans, CPA, MT, PFS


Welcome to Part II of our two-part blog discussing the SECURE Act and its impact on retirement and estate planning.  The Act was signed by the President on December 20, 2019, and is effective as of January 1, 2020. Today’s focus is on the not-so-good parts of the Act.


In Part I, we summarized notable provisions of the Act, focusing on the increase in the Required Minimum Distribution (RMD) age and the removal of age restrictions for making IRA contributions (the good news).  Today we’ll discuss the changes to the RMD rules for inherited retirement plans and the elimination of the “Stretch IRA” (the bad news). Let’s start by

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The SECURE Act - Significant Changes for IRAs and 401(k)s – Part I

Posted on Thu, Jan 02, 2020

By: Beth Gaasbeck, CPA, MBA and Robert N. Polans, CPA, MT, PFS


On December 20, 2019, President Trump signed the Setting Every Community Up for Retirement Enhancement Act (the SECURE Act) as part of the Further Consolidated Appropriations Act, 2020, effective 1/1/2020.  Not exactly a Holiday present, there are favorable and unfavorable provisions impacting your retirement planning.  In this two-part series, we will take a closer look at the highlights under the  law.


Several notable provisions include:

  • Increase in the age to take required minimum distributions from 70 ½ to 72
  • Removal of age restrictions for making IRA contributions
  • Shortened timeline for taking post-death required
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Retirement Planning Late in the Game

Posted on Thu, Sep 26, 2019

By: Matthew Walker, CPA


Every day you put off funding your retirement is another day your nest egg could be growing. Starting late may seem like a tall task, but it is still possible to set aside enough for a comfortable retirement if you begin the process now, rather than later. It is first imperative that you develop a plan, set goals and begin action. The longer you wait, the harder it will be to catch up. Here are some tips to help…


How much do I need to retire?

It is impossible to plan for the future unless you have a clear picture of your current financial position.  You should start by preparing a list with all your assets and liabilities, as well as a list of your sources of

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Talking Taxes with Kids – 529 Plans, IRAs and 401(k)s

Posted on Thu, Aug 15, 2019

By: Stacie L. Court, CPA, MST


There are many benefits to contributing early to education plans, IRAs, and 401k’s – the largest benefit being the advantage of time to compound funds in tax-advantaged accounts.   Children have many years to grow the earnings in these funds, but how do you talk to your kids about the complex world of investing in these types of funds and encourage them to start early? 


Let’s begin by discussing these different types of plans:   


Section 529 Plans

A 529 plan is a tax-advantaged savings plan used to make it easier to save money for college, post-secondary training and tuition for elementary or secondary schools. 


Originally, 529 plans were designed to

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Retirement Savings Strategy Thwarted by New Tax Law

Posted on Thu, Mar 15, 2018

By: Karolyn R. Banks, CPA, MT


Another casualty of the 2017 Tax Cuts and Jobs Act (“TJCA”) is the ability to recharacterize a Roth IRA conversion. Prior to this change, taxpayers generally had until October 15 of the year following the year of a Roth IRA conversion to recharacterize the transaction. With the president’s signing of the TJCA, those saving with Roth IRAs must rethink this strategy.


Background on Roth IRAs

The Roth IRA was established in 1997 under the Taxpayer Relief Act is a a popular retirement savings tool. Contributions to a traditional IRA are usually deductible with the funds growing tax deferred and only taxed when distributions are made. A Roth IRA differs because

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Millennial Series Part XI: Holiday Gifts and Roth IRAs

Posted on Wed, Dec 13, 2017

By: Tim Carroll, CPA, MST


Retirement savings doesn’t top the holiday wish list for many young people, but it should.  You can help create the next generation of savers this season by gifting contributions to retirement plans and educating the children in your life about why your gift is worth more than an iPhone X or Nintendo Switch.


It’s simple math: $5,000 invested at the age of 16, growing at the historical average stock market return of 7%, will be $137,650 by age 65.  The same $5,000 invested at age 26 would only be $69,974 at 65.  That ten-year delay results in a reduction of almost 50% in ultimate return.


Those numbers raise the question, how can we encourage saving at an

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Don’t Forget! Report 2010 In-plan Roth Conversions on 2012 Tax Returns

Posted on Thu, Feb 21, 2013


Confusion abounds as recent changes in the tax laws begin to take root. It’s like the perfect tax storm mixing changes enacted years ago, which didn’t take effect until this year, with the Taxpayer Relief Act of 2012.  One of these changes from a few years ago deals with in-plan Roth conversions and how the taxable income is reported.


Under a special rule that applied only to 2010 Roth conversions, you were allowed to include half the taxable amount in your income for 2011 and half for 2012.  Unless you selected as a special option to include all of this income on your 2010 return, you are due to report half on your 2012 return.  Normally, and in future years, Roth conversions are

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