IRA Year-End Reminders

Many people are already gearing up for the holiday season but it is important to think about any outstanding IRA issues that you may still need to take care of by December 31st.

Account Splitting
You only have until December 31st of the year following the year of an IRA owner’s death to split an inherited IRA into separate accounts for beneficiaries.

Roth Conversions
Did you convert your traditional IRA to a Roth this year or are you planning to for the 2016 calendar year? If so, you have until December 31st for those retirement funds to be transferred out of the traditional IRA account and into the Roth.

Required Minimum Distributions (RMDs)
Were you already 70½ or older before January 1st? Did you inherit an IRA last year? Did you inherit an IRA this year and was that IRA owner who passed away over 70½?
If any you answered yes to any of these questions, you may be required to take an RMD by December 31st if you haven’t already done so. Remember, RMD rules also apply to inherited Roth IRAs. Failure to take a timely RMD will result in a 50% penalty on the undistributed amount!

Account Statement Accuracy
Custodians are people too and they make mistakes like everyone else. Be sure to check your financial statements and pay specific attention to details. You want to be sure all transactions and activity have been properly recorded. This review will allow you to catch mistakes now and help you avoid the costly corrections and/or penalties later.

If you wait until the last minute to address these types of issues, you run the risk of overlooking something that could result in tax penalties and perhaps irreversible error. You should also check with your custodian regarding their internal year-end deadlines. Your custodian may require you to submit certain paperwork earlier than December 31st.

More Updates


For trusts that inherited an IRA in 2019, an important deadline is approaching. The due date to provide required trust documentation to the IRA custodian to ensure that the longest payout period possible is available for the inherited IRA is October 31, 2020. Generally, only individuals who are named on an IRA beneficiary form can

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The coronavirus-related distribution (CRD) rules for Roth conversions have a gaping hole. An “affected person” (as we have defined in previous blogs), is entitled under the CARES Act to withdraw up to $100,000 from their IRA or workplace retirement plan. A CRD avoids the 10% early distribution penalty for those under 59 1/2, can be

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Rolling Over an RMD

Like most people’s lives, the retirement world is upside down. This is made evident by a single statement: “Required minimum distributions (RMDs) can be rolled over.” Yes, that is the new normal—at least for this year. RMDs are considered the first money out of an IRA and workplace plan. Typically, these dollars are ineligible to

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