Hall & Company CPAs Tax Review: Individuals With IRAs or Qualified Retirement Plans Have Until November 30, 2009 to Roll Over or Return Account Distributions to IRAs

Hall & Company CPAs Tax Review: Individuals With IRAs or Qualified Retirement Plans Have Until November 30, 2009 to Roll Over or Return Account Distributions to IRAs
For 2009 only, retirees and others who have taken a required minimum distribution (RMD) from an individual retirement account (IRA) or qualified retirement plan may roll over or return the funds to their account without facing tax liability, but they only have until November 30, 2009 to do so.

Irvine, CA November 30, 2009 — Hall & Company CPAS are advising for 2009 only, retirees and others who have taken a required minimum distribution (RMD) from an individual retirement account (IRA) or qualified retirement plan may roll over or return the funds to their account without facing tax liability, but they only have until November 30, 2009 to do so.
Those with individual retirement accounts (IRAs) or qualified retirement plans are generally required to begin taking distributions from those accounts by December 31st of the year they attain age 70 or by April 1st of the following year. With the 2008 Worker Act, Congress recognized that many retirees would be forced to take their annual required minimum distribution (RMD) during depressed market conditions. In light of the economic climate at the end of 2008, Congress considered that taxpayers with required minimum distribution (RMD) would have to sell assets within their retirement accounts that could have dropped significantly in value in order to make the distributions.
The 2008 Worker Act provides a one year suspension of the required minimum distribution (RMD) rules. Therefore, no minimum distribution is required for calendar year 2009 from retirement accounts for those individuals subject to required minimum distribution (RMD). This required minimum distribution reprieve applies to individual retirement accounts excluding Roth IRAs, 401(k) plans, Section 457(b) plans maintained by a state, or any agency or instrumentality of a state. This is valid for those who took a 2009 payout, whether intentionally, inadvertently, or through automatic distribution.
The normal distribution requirement is measured by the value of the retirement accounts and the individual’s life expectancy. Therefore, if an individual attained age 70 in 2008, he or she was required to begin taking distributions from retirement accounts by December 31, 2008, or if chosen could elect to defer until April 1, 2009 in the first year. There is a downside to this roll over election, because if taken, the individual will need to withdraw two years worth of distributions within one year.
If you are within this age group and would benefit from restructuring these payouts, this grace period could be helpful. You will be required to make a distribution for calendar year 2010 by December 31, 2010. The main reason that a person may want to put the money back into the IRA account or roll it into another account is because they will wind up with less taxable income for 2009, and therefore less income tax to pay. This only applies to one distribution made during calendar year 2009. Another advantage for this group is they will have a larger amount of funds growing tax free in their retirement accounts.
For information about these and other tax laws, interested parties should contact Hall & Company CPAs, Certified Public Accountants, Inc. at 949-910-HALL (4255), or go to wwwhallcpas.com.
Hall & Company CPAs, Inc.
Based in Irvine, California, Hall & Company CPAs, Inc. is an accounting firm that advises its clients on matters ranging from the traditional accounting, financial statements and tax compliance services to consulting advisory services. Hall & Company focuses on building business value in a wide array of industries.
About Bradford Hall, CPA
As the managing director of the Hall & Company, Bradford Hall is actively involved in all aspects of taxation and business planning. He has more than 32 years of experience in public accounting. Hall’s core strengths are in the areas of strategic tax planning for high-net-worth individuals, including corporate owners and executives, closely held corporations, partnerships, LLCs and trusts. He has significant experience negotiating corporate sales/merger, acquisitions and divisional spin-offs. In addition, Hall spends a great deal of time consulting in the area of business management, business succession planning, estate planning and preparation of comprehensive personal financial plans. He represents clients before the IRS, FTB and other taxing authorities.

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