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Some Tax Tips for Our Clients

March 16, 2021

For retirement plan in 2020, the SECURE Act and the CARES Act have created some changes.

  1. Required minimum distribution (RMDs):

Taking required minimum Distributions (RMDs) rises from 70 ½ to 72, at the beginning age, under the SECURE Act. Keep in mind that after 2019, who turned 70 ½ this change only applies to account owners. Without penalty, allows the seniors by the CARES Act to skip their RMDs in 2020.

  1. Contributions of IRA:

To make contributions of the past age of 70 ½ starting in 2020, allows the owners by the SECURE Act of traditional IRAs. In addition, people adopting a child or having a baby can now take payouts from 401(k)s and IRAs of up to  $5,000, for pre age 59 ½ withdrawals and without having to pay the 10% fine.

  1. Post – doctoral and graduate students:

Starting in 2020, Post – doctoral or graduated student for purposes of making IRA contributions will be treated as compensation, and similar or stipend payments and fellowships. Earlier for retirement start saving because prior to this change, and this change is also designed to help qualifying students, generally may not exceed your compensation, contributions for an account retirement.

  1. Inherited workplace and IRA retirement accounts:

Via the SECURE Act, these rules for withdrawing Money from inherited workplace and IRAs accounts have been tightened. Now need to be fully 401(k) participant and within 10 years of the death of the IRA owner, the fund in many accounts. However, life expectancy for surviving spouses, exceptions allow payout over the beneficiary’s, those who are chronically or disabled, minor children until beneficiaries and until also they reach 18 who are not younger more than 10 years than the account owner. (Inherited accounts of individuals are not affected by this change that is died before 2020).

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Copyright by Accu-Tax, Inc. All rights reserved.

Copyright by Accu-Tax. All rights reserved.