Inherited IRA Required Minimum Distribution (RMD) Ruling

The Internal Revenue Service (IRS) has published new guidelines for those people who inherited an Individual Retirement Account (IRA) regarding their Required Minimum Distribution (RMD).

Those who inherited an IRA after 2019 are allowed to skip an RMD this year, with no penalties, but most still must empty the account within 10 years. Final regulations will be issued at a later date regarding 2024 RMDs.

Click here to read "Inherited IRAs Have New Rules Again, What You Need to Know."

Did You Know?

529 Rollover 

SECURE 2.0 was signed into law on December 29, 2022 and beginning in 2024, excess assets in a 529 qualified tuition program will be eligible for a tax-free rollover to a Roth IRA.

The beneficiary of the 529 account and the Roth IRA must be the same, and the 529 account of the beneficiary must have been maintained for at least 15 years. The rollover will be subject to the lesser of (1) the regular Roth IRA limits (without the income limits)

or (2) the aggregate amount contributed to the 529 account over the previous five years (including earnings). The rollovers are subject to a per-beneficiary lifetime limit of $35,000.

If you have any questions, please call the office at (518) 584-2555.

529 Facts:

• A 529 college savings plan is a state-sponsored investment plan that enables you to save money for a beneficiary and pay for education expenses. _{(Source: Blackrock)}
• While 529 plan assets can be used to pay for tuition and books, they can also pay for computers, internet access and other equipment. As well as, room and board, on-campus or off-campus.
• 529 assets can also be used to pay for registered apprenticeship programs and repayment of college debt. _{(Source: LPL Financial)}
• Another option if you have leftover money in your 529 plan and want to avoid paying taxes and a penalty on your earnings is to change the beneficiary to another qualifying family member.

Charitable Giving with Donor Advised Funds (DAF)

A donor-advised fund (DAF) is a charitable giving vehicle that allows donors to make a tax-deductible contribution to a mutual fund serviced by a public charity. The donor retains control over the distribution of the funds, but the sponsoring organization manages the investment of the funds and provides administrative services.

Benefits of donor-advised funds:

• Donors can receive an immediate tax deduction for their contribution.
• The funds can be invested and grow tax-free.
• Donors can recommend grants to charities whenever they want, not just at the end of the year.
• Donors can keep track of their giving and make informed decisions about where to donate their money.

Disadvantages of donor-advised funds:

• There are annual fees and administrative costs.
• Donors cannot revoke a donation once it has been made.
• Donors cannot donate their RMD as a donation.

Factors to consider when deciding whether to open a donor-advised fund:

• Your financial situation: If you have a large amount of money to donate, a DAF can be a good way to save on taxes.
• Your charitable giving goals: If you want to be able to make grants to charities throughout the year, a DAF can be a good option.
• Your time commitment: If you don't have a lot of time to manage your charitable giving, a DAF can be a good way to simplify the process.

At SFS, we enjoy helping our clients utilize their charitable giving the way they want. Don't hesitate to call the office at (518) 584-2555 with any questions or to learn more about Donor Advised Funds.

September in Saratoga Springs

Labor Day weekend typically symbolizes the end of summer, the closing of the Saratoga Race Course and the entry into the Fall season. September will bring many events for all interests and ages to the Saratoga area, such as, Albany’s Riverfront Jazz Festival, Curtis Lumber's car & truck show in Ballston Spa and the 50^th Annual Adirondack Balloon Fest in Queensbury.

As well as, right here in Saratoga Springs. Hosting "Art in the Park" at Congress Park, the 8^th Annual Giant PumpkinFest, the 23^rd Annual Great Pumpkin Challenge 5K/10K and more!

_{Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.}