News & Analysis as of

Mitigating Longevity Risk in DC Plans

401(k) participants face the risk of outliving retirement assets. However, earlier this month, the Internal Revenue Service and the Treasury Department issued final regulations that make it easier for 401(k) plans, individual...more

Wyden’s Previous Proposals Could Signal Tax Reform Priorities

Senator Ron Wyden (D-OR) has been a strong advocate for comprehensive tax reform since he joined the Senate Finance Committee in 2005. During his tenure on the Committee, he has introduced a series of comprehensive tax reform...more

Recent Tax Developments

The following is a summary of the most important tax developments that have occurred in the past several months that may affect you, your family, your investments, and your livelihood. Please call us for more information...more

IRS Gives QLACs the Green Light: Final Regulations Issued

On July 1, 2014, the Internal Revenue Service (“IRS”) issued final regulations (“Final Regulations”) that permit employers and IRA providers to offer “qualified longevity annuity contracts” or “QLACs” under defined...more

Supreme Court Holds Inherited IRAs Not Exempt from Bankruptcy Estate

The Bankruptcy Code permits an individual in bankruptcy to exempt from the bankrupt estate “retirement funds” in an individual retirement account (“IRA”) or certain other tax-advantaged vehicles. In a recent case, the U.S....more

View From McDermott: Expanded In-Plan Conversion Opportunities Will Boost Roth 401(k) Balances

The number of defined contribution plans (including 401(k), 403(b) or 457(b) plans) with a Roth feature has grown significantly in recent years. Roth 401(k) is gaining popularity due in part to tax hedging or tax...more

Finding Love in All of the “Right” Places – Part 1: Deferred Compensation Opportunities within Captive Insurance Companies -...

Overview - In my last article, I produced an overview of closely held insurance companies aka captive insurance companies and their excellent tax benefits for businesses. Separate and apart from the risk management...more

IRS Expands Guidance on In-Plan Roth Conversions

Recent IRS guidance clarifies a number of outstanding questions regarding “in-plan conversions” of non-Roth balances to Roth balances in 401(k), 403(b) and governmental 457(b) plans. In particular, the guidance confirms that...more

In-Plan Roth Conversions

In December of 2013, the IRS issued Notice 2013-74, which provides plan sponsors with guidance on how plan participants can elect an in-plan Roth conversion of pre-tax amounts not yet eligible for distribution from the...more

Retirement Funds Rollovers: FINRA Ends 2013 By Identifying Its First 2014 Priority

It is the end of the year, and many people are thinking about the status of their retirement accounts and planning any changes to their investments. FINRA also has retirement accounts on the brain. It is thinking about the...more

IRS Issues Notice on Expanded In-Plan Roth Conversion Option

Guidance confirms that plan sponsors have flexibility in designing and implementing a feature that allows participants to convert vested pre-tax balances to after-tax Roth balances....more

Rollovers as Business Startups: A Guide to Using Retirement Funds to Start a Business

Over the past 10 years, thousands of entrepreneurs have used their existing retirement savings held by a qualified retirement plan or IRA to finance the startup or acquisition of a new business. According to industry experts...more

When You Thought It Was Safe to Go Back in the Water - Estate Tax Revisions

In January 2013, when President Obama and Congress compromised on changes in the estate tax area most commentators thought the changes (part of the American Taxpayer Relief Act of 2012) meant that further changes to estate...more

Wills, Trusts & Estates Newsletter - August 2013

In This Issue: - When You Thought It Was Safe to Go Back in the Water - Estate Tax Revisions - Basic Information About Durable Powers of Attorney - Uniform Real Property Transfer on Death Act - Per Stirpes Means...more

Be Careful If ROBS Is Your Business Financing Strategy

Various promoters have suggested to entrepreneurs that they use the assets in their 401(k) plans or IRAs to finance a new business. These programs are sometimes known by the acronym ROBS, or Rollovers as Business Start-ups....more

President Obama’s Pension Cap: Who Would Really Be Affected?

The President’s recent budget proposal would impose a new cap on tax-favored retirement benefits. Annual contributions and accruals under tax-favored plans are already limited, but this would be a complex new limit...more

Say "Goodbye" to Your 401(K) Plan as You Know It?

From time to time, we hear about threats to the Social Security System – even talk about eliminating it for younger workers. Some reports indicate that about half of Americans have less than $10,000 in savings, while other...more

Why Retirement Plan Sponsors Need To Care About Plan Design

Would you leave money on the table for the government to take instead? Would you not maximize your retirement savings because your accountant or third party administrator (TPA) told you that you had to give the same amounts...more

Roth Conversion Opportunities Expand, But Practical Questions Remain

The recent “fiscal cliff” tax law, the American Taxpayer Relief Act (ATRA), includes a provision effective Jan. 1, 2013 that greatly expands the ability of plan participants to convert pre-tax plan accounts to after-tax Roth...more

Fiscal Cliff Legislation Provides New In-Plan Roth Conversion Opportunity

The newly enacted American Taxpayer Relief Act (H.R. 8) includes a significant new opportunity to perform “in-plan” conversions of pretax dollars to Roth (after-tax) dollars of funds held in defined contribution retirement...more

Retirement Saving Roadmap for Young Professionals

The best retirement savings plan begins when you are young and just starting out. If you have the discipline to follow a few simple rules, by the time you reach retirement age, you should be able to do what you want, where...more

Rappelling Down the Fiscal Cliff – Strategies for Cushioning the Fall – Part I

Ready, set, go! Following the Presidential election last night, the race is on for year-end tax planning and bracing for the fall off the fiscal cliff. While no one can tell exactly what the tax outcome will be after...more

The Super Roth IRA[1] - For Regular Guys (and Gals) - Part 2

Overview - In Part I of this series, I introduced the Super Roth IRA an alternative to the Roth IRA and traditional IRA. The Super Roth IRA uses the tax-advantages of permanent life insurance and is a more flexible...more

Gifting and Other Tax Planning Opportunities in 2011

As many of you already are aware, on December 17, 2010, Congress passed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the "Act"). The Act provides for the following: - For 2011,...more

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