Questions on the New IRS Rules on Inherited IRAs? Here’s What CPA Firms Must Do Now
The IRS has recently clarified its stance on required minimum distributions (RMDs) from inherited IRAs. These changes demand immediate attention from CPA firms–they directly affect estate planning and tax compliance for many clients.
Key Changes and Their Impact
The IRS now requires beneficiaries of inherited IRAs to take RMDs annually if the original account holder had started taking them before death. This clarification resolves previous uncertainties and creates several urgent tasks for CPA firms:
Update Estate Planning Strategies: Review and revise plans for clients with inherited IRAs.
Inform Clients Promptly: Ensure beneficiaries understand their new obligations to avoid penalties.
Expand Advisory Services: Use this opportunity to provide valuable insights and optimize clients' tax positions.
Boost Internal Knowledge: Invest in staff training to handle client questions accurately.
Action Plan for CPA Firms
To address these changes effectively, CPA firms should:
Review Client Portfolios: Identify who is affected by the new regulations.
Develop Communication Strategy: Create clear, concise explanations of the changes for clients.
Schedule Client Meetings: Discuss implications and necessary adjustments to financial plans.
Update Internal Processes: Revise checklists and procedures to reflect new RMD requirements.
Collaborate with Estate Planners: Ensure a coordinated approach for complex cases.
Staying Ahead in a Changing Landscape
These IRS changes underscore the need for CPA firms to remain agile and proactive. By acting swiftly to understand and implement these new rules, firms can:
Reinforce their role as trusted advisors
Protect clients from potential penalties
Identify new opportunities for tax-efficient planning
We recognize that many CPA firms are operating at capacity, with staff already stretched thin and as such, we help CPA firms adapt to regulatory changes quickly and effectively, without overburdening their existing teams. Our outsourcing services provide the additional bandwidth needed to manage increased workloads caused by evolving regulations like these new IRS rules.
To learn how we can support your firm in addressing these and other regulatory challenges, please contact us.
