The IRS will waive penalties for RMDs missed in 2024 from IRAs inherited in 2023. This is the fourth year-in-a-row that the IRS has offered this waiver. This reprieve not only continues to impact the landscape of financial planning but provides a potential advantage for discerning beneficiaries seeking to manage their inherited assets more effectively.

This waiver directly benefits beneficiaries of inherited IRAs currently on the 10-year schedule. By waiving the penalty for RMDs missed in 2024, individuals can potentially reduce their taxable income this year by deferring the RMD to 2025. This is an opportunity for those looking for additional flexibility with their tax situations in the short term. However, it is important to note that by deferring, one may subject themselves to a larger tax bill in.

Key Takeaways for Beneficiaries:

• Review current financial plans and consider how this update could impact tax strategies for 2024 and beyond.
• Consult with a financial advisor or tax professional to understand the full implications of the RMD waiver.
• Remain vigilant for any additional guidance from the IRS or further changes in tax legislation that could impact financial planning.
• For a complete view of current inherited IRA regulations, please reference the included exhibit titled “Inherited IRA Flow Chart”.

Conclusion

This IRS waiver presents a valuable tax planning opportunity for individuals with inherited IRAs. At TPW, it is incumbent upon us to highlight the importance of financial awareness and proactive planning in navigating the complexities of tax legislation. Accordingly, be on the lookout for additional updates from our team as they arise.

You. First. Always.

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