IRS Postpones RMD Penalties for Inherited Retirement Accounts
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AAFCPAs and AAF Wealth Management would like to make clients aware that the IRS has issued penalty relief in 2023 for individuals who have not carried forward required minimum distributions (RMDs) on inherited retirement accounts. This guidance applies only to accounts inherited by non-spouse heirs where the decedent had been taking RMDs.
Confusion arose in 2019 when Congress mandated that taxpayers other than spouses inheriting accounts would need to withdraw all IRA funds within 10 years of inheritance as opposed to spanning distributions over their lifetimes. However, they did not immediately clarify what would happen if RMDs had already been started in these accounts. The IRS has since released guidance in the middle of 2022 alerting taxpayers to the fact that distributions must be continued on these inherited IRAs and that you could not wait until year 10 to do so. However, they’ve allowed penalty relief through 2023.
Dan is a leader in AAFCPAs’ Tax Practice advising select clients, including high-net-worth individuals along with their families and business interests. He works extensively with AAF Wealth Management clients, helping to ensure the seamless execution of their holistic financial plans. He navigates the intricacies of compliance, taxation, wealth optimization, asset protection & privacy.
Since joining the firm in 2007, Dan has embraced AAFCPAs’ integrated service model as key to client success. He recognizes that this combination …
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