Table of Contents

Contents

General Disclaimer and Copyright ................................................................................................................ a

About the Author ........................................................................................................................................... b

Reminders- Recent Changes to IRA Rules and Regulations ....................................................................... 1

Changes made by the Setting Every Community Up for Retirement Enhancement Act of 2019

(SECURE Act) .................................................................................................................................... 1

A Summary of the CARES Act’s Provisions for RMD Waivers, Coronavirus Related Distributions and

Loans ............................................................................................................................................... 2

IRS Form 1099‐R and Form 5498 Changes ......................................................................................... 7

2022: Form 1099‐R ........................................................................................................................... 7

2020: Form 1099‐R: Distributions for qualified birth and adoption. .................................................. 7

2020: Form 5498: New repayment code. .......................................................................................... 7

2020: Form 5498: Required minimum distributions (RMDs). ............................................................ 8

IRS Publishes New RMD Tables ........................................................................................................ 8

New Uniform Lifetime Table: Effective for distributions made after 2021 ......................................... 9

1. Summary of Operational Procedures for Setting Up Your IRA ........................................................... 11

How to set up your IRA .................................................................................................................. 11

Your Right to Revoke Your IRA ....................................................................................................... 13

Funding Your IRA ........................................................................................................................... 13

2. Checklist: Designating your beneficiary for your IRA .......................................................................... 14

3. 2022 Limits for IRAs & Employer Plans .............................................................................................. 16

IRA and Salary Deferral Contribution limits if you are under age 50 as at year‐end 2022 ................ 17

IRA and Salary Deferral Catch‐up contribution if you are at least age 50 as at year‐end 2022 ......... 17

2022 MAGI limits for deducting regular contributions to Traditional IRAs ...................................... 18

2022 MAGI limits for making a regular contribution to a Roth IRA .................................................. 18

2022 AGI limits for eligibility for saver’s credit: salary deferral and IRA/Roth IRA contributions ..... 19

4. Traditional IRA Features and Benefits: Quick Reference Guide ........................................................ 20

5. Traditional IRA Funding Options: Quick Reference Guide ................................................................. 23

Regular Traditional IRA Contribution .............................................................................................. 23

Spousal Traditional IRA Contributions ............................................................................................ 24

Recharacterization of Contribution Made to Roth IRA .................................................................... 26

Deemed Traditional IRA Contribution ............................................................................................. 26

Payroll Deduction IRA .................................................................................................................... 27

Employer‐Sponsored IRA ................................................................................................................ 27

Rollover from qualified plans [401(a) and 403(a)], 403(b) and governmental 457(b) plans [Not a

Designated Roth Account (DRA)] .................................................................................................... 27

6. Traditional IRA Deductibility: Quick Reference Guide ........................................................................ 30

Eligibility to deduct regular Traditional IRA Contribution ................................................................ 30

Determination of “Who Is an Active participant” in an Employer Sponsored Plan .......................... 32

7. Roth IRA Features and Benefits: Quick Reference Guide .................................................................. 34

8. Roth IRA Funding Options: Quick Reference Guide .......................................................................... 36

Regular Roth IRA Contribution ....................................................................................................... 36

Spousal Roth IRA Contributions ...................................................................................................... 38

Recharacterization of Contribution Made to Traditional IRA .......................................................... 38

Deemed Roth IRA Contribution ...................................................................................................... 39

Payroll Deduction IRA .................................................................................................................... 39

Employer‐Sponsored IRA ................................................................................................................ 39

Conversion from Traditional IRA, SEP IRA and SIMPLE IRA .............................................................. 40

Retirement plan rollovers from qualified plans [401(a) and 403(a)], 403(b) and governmental 457(b)

plans [non‐Roth] ............................................................................................................................ 41

Designated Roth Accounts (DRA) [Roth 401(k), Roth 403(b) and Roth Governmental 457(b)]

Rollovers ........................................................................................................................................ 43

Military Death Gratuities and Service Members’ Group Life Insurance (SGLI) Payments ................. 44

9. Roth IRA vs. Traditional IRA: Quick Reference Guide ....................................................................... 45

Regular IRA Contribution Limits ..................................................................................................... 45

Contribution eligibility ................................................................................................................... 45

Deadline| Regular IRA Contribution ............................................................................................... 46

Eligibility to deduct contributions ................................................................................................... 46

Age Limitation ................................................................................................................................ 47

Saver’s Credit ................................................................................................................................. 47

Treatment of earnings .................................................................................................................... 47

Distributions | Optional Vs. Required ............................................................................................. 48

10. Saver’s Credit: Quick Reference Guide .......................................................................................... 49

Eligibility Requirements ................................................................................................................. 49

Eligible Contributions ..................................................................................................................... 49

Credit Amount ............................................................................................................................... 50

Reduction of Eligible Contributions ................................................................................................ 51

11. Checklist for Your Regular Traditional and Roth IRA Contribution ................................................. 52

12. The Transfer/Rollover Lingo: Recommend when communicating with financial institutions and plan

trustees ........................................................................................................................................................ 55

13. Rollover and Transfer Permissibility: Quick Reference Guide ........................................................ 58

Summary of rollover/transfer permitted between different type of accounts ............................... 59

Rollover and Transfer Limitations for IRAs and Employer Sponsored Plans: Quick Reference ......... 61

14. Rollover and Transfer Rules for Nonspouse Beneficiaries: Quick Reference ................................ 67

15. Early Distribution Penalty Exceptions: Quick Reference Guide ...................................................... 70

Exceptions to the 10% Early Distribution Penalty ‘by Type of Account’ ........................................... 70

16. Quick Reference: Substantially Equally Periodic Payments/SEPP/72(t): Quick reference Guide . 73

SEPP Guidance ............................................................................................................................... 77

17. Roth IRA Distribution: Tax and Penalty Treatment: Quick Reference ............................................ 80

Quick Reference # 1: Amounts Subject Income Tax and/or the 10% Penalty ................................... 80

18. Tax and Penalty Determination on Nonqualified Distribution from a Roth IRAs: Quick Reference 83

19. Required Minimum Distributions ..................................................................................................... 85

Accounts Subject to RMDs.............................................................................................................. 85

RMD Deadlines for Account Owners ............................................................................................... 86

RMDs and Portability: Summary..................................................................................................... 88

RMD Aggregation Rules .................................................................................................................. 89

RMD Related Definitions ................................................................................................................ 90

IRA RMD Calculation Formula ........................................................................................................ 92

Uniform Lifetime Table .................................................................................................................. 93

20. IRA Beneficiary Distribution Options: When the IRA Owner Died on or before December 31, 2019

Traditional IRA Beneficiary Distribution Options ............................................................................ 94

When the IRA Owner Dies before the Required Beginning Date (RBD) ........................................... 95

When the IRA Owner Died on or after the Required Beginning Date (RBD) ..................................... 96

Notes for Quick Reference ............................................................................................................. 97

Roth IRAs: Beneficiary Distribution Options ................................................................................... 99

Qualified Trust as Beneficiary ....................................................................................................... 100

21. IRA Beneficiary Distribution Options: When the IRA Owner Dies After December 31, 2019 ....... 101

New 10‐Year Rule ......................................................................................................................... 101

Exception to the 10‐Year Rule ...................................................................................................... 102

Transition rule .............................................................................................................................. 102

IRA Beneficiary Options: Eligible Designated Beneficiary & Designated Beneficiary under the SECURE

Act ............................................................................................................................................... 102

Eligible Designated Beneficiary: Spouse and Nonspouse ............................................ 102

Designated Beneficiary ....................................................................................................... 103

Nondesignated Beneficiary ................................................................................................ 103

22. Qualified Charitable Distributions .................................................................................................. 104

General Rules and Requirements for Qualified Charitable Distributions ....................................... 104

QCD and RMDs ............................................................................................................................. 106

QCDs and Basis Amounts.............................................................................................................. 108

QCDs and Deductible Traditional IRA Contributions: No Double Dipping for Tax‐Free ................... 109

23. Tax Reporting Forms and Requirements for IRAs ........................................................................ 111

IRS Form 1099‐R, Distributions from Pensions, Annuities, Retirement or Profit‐Sharing Plans, IRAs,

Insurance Contracts, etc., ............................................................................................................. 111

IRS Form 5498, IRA Contribution Information ............................................................................... 112

IRS Form 990‐T, Exempt Organization Business Income Tax Return .............................................. 112

IRS Form 1042‐S, Foreign Person’s U.S. Source Income Subject to Withholding ............................ 112

Form W‐8CE, Notice of Expatriation and Waiver of Treaty Benefits .............................................. 113

IRS Form 8606, Nondeductible IRAs .............................................................................................. 113

IRS Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax‐Favored

Accounts ...................................................................................................................................... 114

IRS Form 8880, Credit for Qualified Retirement Savings Contributions .......................................... 114

Appendix A. Life Expectancy Tables .................................................................................................. A

Single Life Expectancy‐For Use by Beneficiaries ............................................................................ A

Uniform Lifetime Table: For use by Unmarried Owners, Married Owners Whose Spouses Are Not

More Than 10 Years Younger, and Married Owners Whose Spouses Are Not the Sole Beneficiaries

of Their IRAs) ................................................................................................................................ D

Appendix B: IRS’ Guide to Distribution Codes for IRS Form 1099‐R, as provided to IRA

Custodians/Trustees by the IRS. ....................................................................................................... E

Appendix C: Transactions Reported on IRS Forms 1099‐R and 5498 ................................................... J

Recommended IRA Resources .................................................................................................................... K

SIMPLE, SEP, and SARSEP Answer Book .................................................................................................. L

Roth IRA Answer Book ................................................................................................................................. L