• Complete 2018 qualified charitable distributions (QCDs). QCDs allow IRA owners and beneficiaries who are age 70½ and older to transfer up to $100,000 of IRA funds tax-free to charity. These must be done by the end of 2018. Clients who miss the deadline will miss out on this tax break for the year.
  • Verify that employer plans are emptied if a client is planning on using the net unrealized appreciation (NUA) strategy in 2018. If funds remain in the plan at the end of the year, the lump sum distribution requirement for NUA will not be met, and this valuable tax break may be lost.
  • Do a direct transfer of inherited employer plan funds to a properly titled inherited IRA before the end of 2018 for named non- spouse beneficiaries who inherited the plan funds in 2017. This will ensure that those beneficiaries can use the stretch option in the inherited IRA.
  • Be sure that separate accounts are set up by December 31, 2018 for any IRA beneficiaries who inherited in 2017. Having separate accounts by this deadline allows each beneficiary to stretch distributions over their own life expectancy.
  • Check rollovers completed in 2018. Confirm that all 60-day rollovers during 2018 were completed on time and that only one 60-day rollover (IRA-to-IRA or Roth IRA-to-Roth IRA) per account owner was done in a 365-day period. Rollovers that do not meet the rules generally create excess contributions in the receiving account. © 2018 Ed Slott and Company, LLC

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Walter F. Pardo, Founding Partner

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