Tax and financial advice from the Silicon Valley expert.

Final regulations issued for Required Minimum Distributions

The IRS has issued final regulations (TD 1001) and proposed regulations (REG-103529-23) relating to Required Minimum Distributions from traditional and Roth qualified retirement plans, including Section 401(k) plans, and IRAs.

The regulations explain the rules for required minimum distributions under the SECURE Act of 2019 and SECURE 2.0 Act of 2022.

The final regulations are mostly the same as previously-issued proposed regulations with some minor changes in response to comments received by the IRS.

Notably, the final regulations didn’t change a controversial rule in previously-issued proposed regulations requiring that distributions be made annually when the plan participant dies after the required beginning date and annual required minimum distributions already applied during their lifetime. (This rule doesn’t apply to Roth account participants, because there is no required beginning date during their lifetimes.)

In most cases, that means when a plan participant dies after the required beginning date and annual required minimum distributions already applied during their lifetime, life expectancy distributions continue for the next nine years and the balance of the account is distributed during the tenth year after death. See your tax advisor for exceptions for “eligible designated beneficiaries” (including the surviving spouse) and non-designated beneficiaries.

See your tax advisor about how the new regulations apply for you and your family.

Big Brother wants to watch EVEN MORE!

Under the Notice of Proposed Rulemaking, transfers to a legal entity, including a TRUST, corporation, partnership, limited partnership or limited liability company, of residential real estate of up to four units and unimproved land zoned for occupancy by one to four families that don't involve financing through a financial institution would have to be reported on a Real Estate Report to FinCEN within 30 days or a sale or transfer, and copies kept by the reporting person and other parties for five years.

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Market-based sourcing means tax headaches for service sole proprietors

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California FTB follows IRS with November 16 due date as California storm relief

The California Franchise Tax Board announced the evening of October 16, 2023 it is following the IRS by adopting a November 16, 2023 due date for 2022 income tax returns and payments for taxpayers who previously qualified for the October 16, 2023 due date. The relief applies to 55 of 58 California counties.

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At the last minute, IRS further extends 2022 filing and payment date for California storm victims

For residents of 55 of California's 58 counties that previously qualified for extended filing relief, the IRS has announced TODAY the tax-filing and tax-payment deadline has been further extended to November 16, 2023.

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Roth requirement for 401(k) catch-up contributions postponed

The IRS has announced a two-year administrative transition period for catch-up contributions to a qualified retirement plan (including a Section 401(k) plan) by highly compensated employees, permitting them to continue to be made on a pre-tax basis for taxable years beginning before January 1, 2026.

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Tax and financial advice from the Silicon Valley expert.