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Changes Are Coming to Your IRA
AT THE END OF 2019, Congress passed legislation that includes a variety of changes regarding retirement accounts, including IRAs. Outlined below are highlights of the changes in the law which any IRA account owner should be aware of:
• The required minimum distribution (RMD) will now increase from age 70½ to 72 for anyone turning 70½ after Dec. 31, 2019.
Parents can withdraw up to $5,000 from an IRA within a year of a child’s birth or adoption without penalty but must pay income tax on the withdrawal.
Individuals who inherit an IRA from people who passed away after Dec. 31, 2019, must take the money out of the IRA and pay all taxes due within 10 years, with exceptions for spouses, minor children and heirs who are chronically ill or disabled. Some commentators say that this 10-year rule applies to regular and Roth IRA accounts. This could have a profound impact on many heirs of large IRA accounts. •
The minimum age for Qualified Charitable Distributions (QCDs) is not changed by the law. QCDs can still be made to charity without being taxed for anyone age 70½ or older.
A more detailed article on this topic will be available in the spring issue of “The Blitz” newsletter. Attorney Alvin Blitz will specifically address the use of the charitable remainder trust to extend the time period beyond 10 years for inherited IRAs. If you would like to receive “The Blitz,” please contact the Masonic Charities Office of Gift Planning at 1-800-599-6454.
