Retirement Plans Consultation

At MS Group CPA, our tax experts are trained to be proactive and analytical while never losing sight of the client’s "big picture". Our goal for each tax client is to review their highly individualized situation, ask the pertinent investigative questions and then explain in non-technical terminology how we can reduce their tax liability and plan properly for the coming years. 

MS Group CPA provides consultation and reporting services for all retirement plans including the Company’s employee benefits plans, in such areas as whole life planning, taking anticipatory and preemptive steps to minimize taxes, tax compliance and representation before taxing authorities. We also provide the following services:

· Form 5500 Reporting

· Assist the Company to compliance with IRS retirement plans regulations.

· Be a third party administrative of the Company’s retirement plans.

Withdrawal rules for Traditional IRAs

With Traditional IRAs, you defer taxes until you begin to withdraw money. The rules vary depending on your age.

Withdrawals prior to age 59½

Distributions from Traditional IRAs prior to age 59½ are subject to a 10% penalty, in addition to applicable federal and state taxes. Under the following circumstances, you may be able to avoid the penalty on early withdrawals:

· First-time home purchase

· Qualified education expenses

· Death or disability

· Unreimbursed medical expenses

· Health insurance, if you're unemployed

If one of these exceptions applies, then you may need to fill out IRS Form 5329 when you file your taxes. Please see the instructions on IRS Form 5329 and talk to our tax advisor.

Withdrawals between age 59½ and 72

Starting at age 59½, you can begin taking money out of your retirement accounts without penalty. Keep in mind that you'll have to pay any federal or state taxes that might be due. You should also consider creating a plan for taking distributions; call our tax advisors to help you determine if your assets will provide the income you need during retirement.

In addition, we offer the Retirement Benefits Calculation Center which provides tailored guidance and resources as you progress through retirement years.

Withdrawals at age 72 and beyond

Starting at age 72, owners of Traditional IRAs must begin making withdrawals, also known as minimum required distributions (MRDs), from their accounts. These withdrawals are mandatory and violations incur severe penalties. There is no MRD requirement for Roth IRAs during the lifetime of the original owner. Our Retirement Benefits Calculation Center can help you calculate and manage your MRD. Our system provides estimated MRDs for your IRAs (Traditional IRAs, SEP IRAs, SIMPLE IRAs, Rollover IRAs, and all small-business retirement plans). It also keeps track of withdrawals, and allows you to schedule automatic withdrawals so you are never behind.

Minimum Required Distributions (“MRDs”)

If you own a Traditional IRA, learn about withdrawals you're required to take.

Turning age 72 is a major milestone if you own an IRA. If you have a Traditional IRA, that's when you must begin withdrawals, or minimum required distributions (“MRDs”), also known as required minimum distributions or RMDs. MRDs are mandatory, minimum yearly withdrawals that generally must be taken starting in the year the IRA account holder turns 70½.

If you inherit an IRA, you will generally be required to begin taking MRDs by a certain date or incur a penalty; call us for Inherited IRAs

For Roth IRAs, there are no MRDs for the original owner. If you have both kinds of IRAs, withdrawals from a Roth IRA will not help satisfy your annual MRD requirement for your Traditional IRA.

Taking MRDs

You generally have until April 1 of the year following the calendar year you turn age 72 to take your first MRD. In subsequent years, the deadline is December 31. MRDs will be required each year for the remainder of your life after 72.

Penalties for taking less than your MRD after 72 can be severe—up to 50% of the amount not taken.

In addition to being mindful of MRDs, you should also consider creating an overall plan for taking withdrawals that includes all of your retirement income sources.

How MRDs are taxed

MRDs are taxed as ordinary income for the tax year in which they are taken and will be taxed at your applicable individual federal income tax rate. MRDs may also be subject to state and local taxes. If you made nondeductible contributions to your IRA, you must calculate your MRD based on the total balance, but your taxable income may be reduced proportionately for the after-tax contributions. Please consult us to learn more.