CHAPTER 1
RETIREMENT TAX PLANNING SUMMARY
§ 1.01 Initial Tax Planning for Retirement
-----[1] Initial Considerations for Tax Planning for Retirement
-----[2] Payment Options Under Employer Retirement Plans
----------[a] Payment Options in General
----------[b] Non-tax Considerations Affecting Choice of Payment Option
----------[c] Taxation of an Annuity Payable over One or More Lifetimes
----------[d] Taxation of Required Spousal Annuities
----------[e] Taxation of Distributed Annuity or Life Insurance Contracts
----------[f] Taxation of a Lump Sum Distribution of the Entire Amount of Benefits
----------[g] Taxation of a Lump Sum Distribution of a Portion of Total Benefits
----------[h] Distribution of Employer Securities
----------[i] Payment Elections Under Eligible Exempt Organization Plans
----------[j] Payment Elections Under Unfunded Nonqualified Plans
-----[3] Transfers from Employer Retirement Plans to IRAs
----------[a] Transfers from Employer Retirement Plans to IRAs Generally
----------[b] Employer Plans Qualifying for Tax-Free Transfers to IRAs
----------[c] Tax-Free Trustee-to-Trustee Transfers from a Plan to an IRA
----------[d] Tax-Free Indirect Rollovers from a Plan to an IRA
----------[e] Retention or Transfer of Investment in the Plan
----------[f] Transfer of Employer Securities
----------[g] Timing of Transfers from a Qualifying Plan to an IRA
----------[h] Transfers from Retirement Plans to IRAs by Surviving Spouse
-----[4] Avoiding the Penalty on Certain Early Distributions
----------[a] Penalty Tax and Exceptions
----------[b] Avoiding the Penalty Using Substantially Equal Periodic Payments
----------[c] Avoiding the Penalty by Purchasing a Single-Premium Immediate Annuity
----------[d] IRA Funds Transferred to an Employer Plan to Avoid the Penalty
----------[e] Early Retirement of a Police Officer, Firefighter, or Emergency Medical Worker
§ 1.02 Tax Planning During Retirement Years
-----[1] Funds in Tax-Favored Plans Contributed to Roth IRAs
----------[a] Taxable Qualified Rollover (TQR) Contributions
----------[b] Long-term Tax Savings Due to Tax Rate Differential
----------[c] Long-term Tax Savings Due to Transfer of High Income Assets
----------[d] Transfers to Roth IRAs When Funds Not Needed in Retirement
----------[e] Satisfying the Conditions Imposed on TQR Contributions
----------[f] Trustee-to-Trustee TQR Contributions to a Roth IRA
----------[g] Indirect TQR Contribution from a Tax-Favored Plan to a Roth IRA
----------[h] Choice of Qualified Plan or IRA for Making a TQR Contribution
----------[i] IRA Conversion While Receiving Substantially Equal Periodic Payments
----------[j] Reversals of TQR Contributions to Roth IRAs
----------[k] TQR Contributions by Surviving Spouses
-----[2] Planning for Required Minimum Distributions
----------[a] Required Minimum Distribution Rules Generally
----------[b] Choice of Annuity or Non-Annuity Minimum Distributions
----------[c] Planning Non-Annuity Distributions for the First Minimum Distribution Year
----------[d] Planning Non-Annuity Distributions for Married Individuals
----------[e] IRAs and Plans Making both Annuity and Non-Annuity Minimum Distributions
-----[3] Temporary Personal Use of Funds Rolled Over to an IRA
-----[4] The Nontaxable Portion of Social Security Benefits
----------[a] Lowering Taxes on Social Security Benefits Generally
----------[b] Lump Sum Payment of Prior Year Social Security Benefits
-----[5] The Nontaxable Portion of U.S. Military Disability Pay
-----[6] Plan Insurance Premium Payments for Retired Police, Firefighters, etc.
-----[7] Deductions for Long-Term Care Services
-----[8] Long-Term Care Insurance
-----[9] Fees Paid to Continuing Care Retirement Communities
----[10] IRA Distributions Paid Directly to Charities
----[11] Payments for Long-Term Disability
----------[a] Sourced Disability Payments
---------------[i] Taxable in Proportion to Employer Contributions
---------------[ii] Conversions to Retirement Benefits
---------------[iii] Corrections of Employer Errors or Methodology
----------[b] Exempt Disability Benefits
---------------[i] Types of Exempt Disability Benefits
---------------[ii] Workers’ Compensation
---------------[iii] Tort Judgments or Settlements for Disability
---------------[iv] Structured Settlements
---------------[v] Interest, Medical Expenses, and Attorneys Fees
§ 1.03 Beneficiary Tax Planning
-----[1] Tax Deferral Planning Generally
-----[2] Tax Deferral Planning for Surviving Spouse Who Is Sole Beneficiary
----------[a] Choice of Rules for Tax Deferral Planning for Spouses
----------[b] Spousal Choice of Five-Year Rule or Life Expectancy Rule
---------------[i] Death in Calendar Year before Year Attaining Age 65 ½.
---------------[ii] Death in Calendar Year Attaining Age 65 ½ or in Subsequent Years
---------------[iii] Limited Period for Choosing Distribution Rule
----------[c] Spousal Election to Own IRA or Roth IRA
---------------[i] Spousal Ownership of Roth IRAs
---------------[ii] Spousal Ownership of IRA; Spouse Younger than Decedent
---------------[iii] Spousal Ownership of IRA; Spouse Older than Decedent
---------------[iv] IRA or Roth IRA Ownership Election for Young Surviving Spouse?
---------------[v] Alternative Where IRA Ownership Election Not Available
---------------[vi] Interest of Surviving Spouse in a Qualified Retirement Plan
----------[d] Surviving Spouse’s Designation as Owner or Beneficiary After Rollover
-----[3] Tax Planning if Spouse Not Sole Beneficiary
----------[a] Choice of Rules for Tax Deferral Planning
---------------[i] Comparison of the Five-Year Rule and the Life Expectancy Rule
---------------[ii] Choice of the Five-Year Rule or the Life Expectancy Rule
---------------[iii] Limited Period for Choosing Distribution Rule
----------[b] Rollovers by Beneficiaries
-----[4] Advantages of Establishing Separate Accounts for Beneficiaries
-----[5] Advantages of a Trust as the Beneficiary of a Plan or Arrangement
----------[a] Choosing a Trust as Beneficiary of a Plan or Arrangement
----------[b] Divisions of Plan Accounts or Inherited IRAs Held by Trusts
-----[6] Use of Disclaimers to Lengthen Tax Deferral for Beneficiaries
-----[7] Planning to Reduce Federal Estate Taxes
-----[8] Designation of Charity as a Beneficiary
-----[9] Advantages of Personally Purchasing an Annuity
-----[10] Beneficiary Elections for Unfunded Nonqualified Plans
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RETIREMENT TAX PLANNING SUMMARY
§ 1.01 Initial Tax Planning for Retirement
-----[1] Initial Considerations for Tax Planning for Retirement
-----[2] Payment Options Under Employer Retirement Plans
----------[a] Payment Options in General
----------[b] Non-tax Considerations Affecting Choice of Payment Option
----------[c] Taxation of an Annuity Payable over One or More Lifetimes
----------[d] Taxation of Required Spousal Annuities
----------[e] Taxation of Distributed Annuity or Life Insurance Contracts
----------[f] Taxation of a Lump Sum Distribution of the Entire Amount of Benefits
----------[g] Taxation of a Lump Sum Distribution of a Portion of Total Benefits
----------[h] Distribution of Employer Securities
----------[i] Payment Elections Under Eligible Exempt Organization Plans
----------[j] Payment Elections Under Unfunded Nonqualified Plans
-----[3] Transfers from Employer Retirement Plans to IRAs
----------[a] Transfers from Employer Retirement Plans to IRAs Generally
----------[b] Employer Plans Qualifying for Tax-Free Transfers to IRAs
----------[c] Tax-Free Trustee-to-Trustee Transfers from a Plan to an IRA
----------[d] Tax-Free Indirect Rollovers from a Plan to an IRA
----------[e] Retention or Transfer of Investment in the Plan
----------[f] Transfer of Employer Securities
----------[g] Timing of Transfers from a Qualifying Plan to an IRA
----------[h] Transfers from Retirement Plans to IRAs by Surviving Spouse
-----[4] Avoiding the Penalty on Certain Early Distributions
----------[a] Penalty Tax and Exceptions
----------[b] Avoiding the Penalty Using Substantially Equal Periodic Payments
----------[c] Avoiding the Penalty by Purchasing a Single-Premium Immediate Annuity
----------[d] IRA Funds Transferred to an Employer Plan to Avoid the Penalty
----------[e] Early Retirement of a Police Officer, Firefighter, or Emergency Medical Worker
§ 1.02 Tax Planning During Retirement Years
-----[1] Funds in Tax-Favored Plans Contributed to Roth IRAs
----------[a] Taxable Qualified Rollover (TQR) Contributions
----------[b] Long-term Tax Savings Due to Tax Rate Differential
----------[c] Long-term Tax Savings Due to Transfer of High Income Assets
----------[d] Transfers to Roth IRAs When Funds Not Needed in Retirement
----------[e] Satisfying the Conditions Imposed on TQR Contributions
----------[f] Trustee-to-Trustee TQR Contributions to a Roth IRA
----------[g] Indirect TQR Contribution from a Tax-Favored Plan to a Roth IRA
----------[h] Choice of Qualified Plan or IRA for Making a TQR Contribution
----------[i] IRA Conversion While Receiving Substantially Equal Periodic Payments
----------[j] Reversals of TQR Contributions to Roth IRAs
----------[k] TQR Contributions by Surviving Spouses
-----[2] Planning for Required Minimum Distributions
----------[a] Required Minimum Distribution Rules Generally
----------[b] Choice of Annuity or Non-Annuity Minimum Distributions
----------[c] Planning Non-Annuity Distributions for the First Minimum Distribution Year
----------[d] Planning Non-Annuity Distributions for Married Individuals
----------[e] IRAs and Plans Making both Annuity and Non-Annuity Minimum Distributions
-----[3] Temporary Personal Use of Funds Rolled Over to an IRA
-----[4] The Nontaxable Portion of Social Security Benefits
----------[a] Lowering Taxes on Social Security Benefits Generally
----------[b] Lump Sum Payment of Prior Year Social Security Benefits
-----[5] The Nontaxable Portion of U.S. Military Disability Pay
-----[6] Plan Insurance Premium Payments for Retired Police, Firefighters, etc.
-----[7] Deductions for Long-Term Care Services
-----[8] Long-Term Care Insurance
-----[9] Fees Paid to Continuing Care Retirement Communities
----[10] IRA Distributions Paid Directly to Charities
----[11] Payments for Long-Term Disability
----------[a] Sourced Disability Payments
---------------[i] Taxable in Proportion to Employer Contributions
---------------[ii] Conversions to Retirement Benefits
---------------[iii] Corrections of Employer Errors or Methodology
----------[b] Exempt Disability Benefits
---------------[i] Types of Exempt Disability Benefits
---------------[ii] Workers’ Compensation
---------------[iii] Tort Judgments or Settlements for Disability
---------------[iv] Structured Settlements
---------------[v] Interest, Medical Expenses, and Attorneys Fees
§ 1.03 Beneficiary Tax Planning
-----[1] Tax Deferral Planning Generally
-----[2] Tax Deferral Planning for Surviving Spouse Who Is Sole Beneficiary
----------[a] Choice of Rules for Tax Deferral Planning for Spouses
----------[b] Spousal Choice of Five-Year Rule or Life Expectancy Rule
---------------[i] Death in Calendar Year before Year Attaining Age 65 ½.
---------------[ii] Death in Calendar Year Attaining Age 65 ½ or in Subsequent Years
---------------[iii] Limited Period for Choosing Distribution Rule
----------[c] Spousal Election to Own IRA or Roth IRA
---------------[i] Spousal Ownership of Roth IRAs
---------------[ii] Spousal Ownership of IRA; Spouse Younger than Decedent
---------------[iii] Spousal Ownership of IRA; Spouse Older than Decedent
---------------[iv] IRA or Roth IRA Ownership Election for Young Surviving Spouse?
---------------[v] Alternative Where IRA Ownership Election Not Available
---------------[vi] Interest of Surviving Spouse in a Qualified Retirement Plan
----------[d] Surviving Spouse’s Designation as Owner or Beneficiary After Rollover
-----[3] Tax Planning if Spouse Not Sole Beneficiary
----------[a] Choice of Rules for Tax Deferral Planning
---------------[i] Comparison of the Five-Year Rule and the Life Expectancy Rule
---------------[ii] Choice of the Five-Year Rule or the Life Expectancy Rule
---------------[iii] Limited Period for Choosing Distribution Rule
----------[b] Rollovers by Beneficiaries
-----[4] Advantages of Establishing Separate Accounts for Beneficiaries
-----[5] Advantages of a Trust as the Beneficiary of a Plan or Arrangement
----------[a] Choosing a Trust as Beneficiary of a Plan or Arrangement
----------[b] Divisions of Plan Accounts or Inherited IRAs Held by Trusts
-----[6] Use of Disclaimers to Lengthen Tax Deferral for Beneficiaries
-----[7] Planning to Reduce Federal Estate Taxes
-----[8] Designation of Charity as a Beneficiary
-----[9] Advantages of Personally Purchasing an Annuity
-----[10] Beneficiary Elections for Unfunded Nonqualified Plans
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| Copyright © 2005-2010 by Vorris J. Blankenship All Rights Reserved |
The author intends that this website provide accurate and authoritative information on the subject
matter covered. However, the information provided on this website is not a substitute for the advice of
an attorney, accountant, or other professional; and the author is not offering legal, accounting, or
other professional advice. The material presented on this website is not intended for use, and may
not be used, to avoid tax penalties. If you need legal advice or other professional help, you should
seek (from an independent attorney, accountant, or other competent professional) advice based on
your own particular circumstances.
matter covered. However, the information provided on this website is not a substitute for the advice of
an attorney, accountant, or other professional; and the author is not offering legal, accounting, or
other professional advice. The material presented on this website is not intended for use, and may
not be used, to avoid tax penalties. If you need legal advice or other professional help, you should
seek (from an independent attorney, accountant, or other competent professional) advice based on
your own particular circumstances.
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