You may know that the requirement for some people to make withdrawals from their retirement accounts was waived for this year, 2020. In the past, these Required Minimum Distributions generally applied to people over age 70.
Since the waiver was passed after some people had already taken withdrawals out, the benefit was not evenly spread. But now new guidance has been issued.
Anyone who took out IRA distributitions in the first half of the year 2020 may now repay those distributions by August 31 and avoid paying tax. It could make sense to review your options if you are in this situatiton.
Among the considerations we’ll be looking at:
• Whether there are sufficient cash balances to make the repayment without strain.
• If repayment would make room for Roth IRA conversions instead of outright withdrawals.
• Thinking about the possibility of higher tax rates later, and leaving 2020 withdrawals in place.
Everyone has difference circumstances and objectives, so a personal consultation might make sense for you. Or you might want to review overall retirement funding options at this time.
Clients, if you would like to talk about this or anything else, please email us or call.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.