Change in Required Minimum Distribution Rules for IRA’s

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Change in Required Minimum Distribution Rules for IRA’s

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On December 23, 2008, President Bush signed a bill entitled “The Worker, Retiree and Employer Act of 2008”. One of the provisions of the bill is a one-year moratorium on required minimum distributions (or “RMDs”) from IRA’s for 2009.

What this means to IRA account holders:

  1.  IRA holders who reach the age of 70 ½ or older in 2009 will not be subject to required minimum distributions for tax year 2009
  2.  Holders of inherited IRAs will also not be required to take a minimum distribution for 2009.
  3.  For IRA beneficiaries who have chosen to use the five-year rule after the death of the original IRA holder, 2009 is disregarded in determining the five-year period.
  4.  IRA holders who reached age 70 ½ in 2008 and chose to defer their first RMD until April 1, 2009, are still required to take their 2008 required minimum distribution.

If you have any questions about this or other tax matters feel free to call me at the office, 678-624-4775 or email me at Peter@TarantinoCo.com