Retirement Penalties and Rollover Issues 2024

Overview

Taking money from a retirement plan before age 59-1/2 or failing to withdraw funds after age 73 leads to penalties. Plan beneficiaries have a separate set of rules as well. There are penalty exceptions and waivers, but some issues have no possible resolution. A withdrawal from a retirement plan is taxable unless it’s returned to a plan within 60 days. Some withdrawals cannot be returned and there are some ways to make a late rollover tax-free. Early and late distribution penalties and 60-day rollover failures are prevalent issues that tax preparers must handle despite the size of the firm or the wealth of their clients. Learn the rules of the road in this class. Note: This class presents an in-depth discussion of issues presented in the instructor’s class Retirement Distributions: Planning Options.

Highlights

• What the IRS knows: Forms 1099R and 5498 • Exceptions to the ten percent penalty • Secure 2.0 changes to the late payment penalty • History of the 60-day Rule and Recent Developments • Rulings and self-certification • Form 5329 use and strategies

Prerequisites

None

Designed For

CPAs, tax staff and other tax professionals.

Objectives

• Identify exceptions from the 10% penalty for early distributions from retirement plans, IRAs and annuities • Recognize the far reach of the once per year rollover rule and what circumstances have fatal consequences • Determine the difference between Rollovers and Transfers

Preparation

None