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Time Your IRA Transaction Right to Get Benefits and Avoid IRS PenaltiesProtecting your IRA from penalties and taking advantage of tax strategies is all about timing. This ranges from your IRA custodian providing you with timely notifications about important deadlines, to you completing transactions timely to get tax benefits. Use this calendar to remind you of some of these important deadlines. |
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| Reminder: Deadlines that fall on a weekend or public holiday are extended to the next business day | |
| IRA Calendar for IRA Events that Occur in or for 2023 | |
| Event & Deadline | General Requirements & Tips |
| Due Date: January 31
What is Due: IRS Form 1099-R statement
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Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.(1099-R): If you had any distributions of $10 or more done from your IRA in 2022, your IRA Custodian/Trustee must send you a Form 1099-R by January 31, 2023. They are also required to send your Form 1099-R to the IRS and the IRS uses the information to compare it against what is reported on your tax return.
Action that must be taken: a. You must provide a copy of your 1099-R to your tax preparer b. Your tax preparer must report the information on your tax return c. Your tax preparer must attach a copy of your 1099-R to your tax return if income taxes were withheld from your distribution.
Tax Saving Tips for Your Tax Advisor Check the amount in Box 1: Gross Distribution. Your tax advisor may use this for purposes that include whether you satisfied any other mandatory distributions, and to determine how much should be reported as income on your tax return. Check the amount in in Box 2a. Taxable Amount. The taxable amount of your distribution should be inputted in this box. Caution: It might show a nontaxable amount as taxable. In such cases, your tax preparer must make the required correction on your tax return and provide the IRS with an explanation of why the amount is nontaxable. Box 2b. Taxable Amount Not Determined. This might need to be checked. This lets the IRS know that there might be some corrective reporting to the taxable amount reported in Box 2a. Check the code in Box 7. Distribution Code(s). This code lets the IRS know the type of distribution. Examples include whether the distribution: is subject to the 10% additional tax (early distribution penalty), represents a direct rollover to another retirement plan, and whether the amount represents a correction of an impermissible contribution. |
| Due Date: January 31
What is Due: Your fair market value statement for your IRA |
Action that must be taken
Your IRA custodian must provide you with a fair market value statement for your IRA by January 31, 2023. If you must take any required minimum distribution (RMD), your tax preparer may use the information to verify your RMD amount for the current year. |
| Due Date: January 31
What is Due: Your RMD Statement |
Action that must be taken
Your IRA custodian must provide you with an RMD statement by January 31, 2023. if you will be of RMD age as of December 31, 2023. The statement must include your calculated RMD amount or an offer to calculate your RMD. |
| Due Date: April 1
What is Due: Your RMD if you reached RMD age in 2022 |
Action that must be taken
If you just reached RMD age in 2022 an RMD must be taken from your Traditional/ SEP/SIMPLE IRA) for 2022, but it can be taken as late as April 1, 2023. If you miss this deadline, you will owe the IRS an excise tax on any shortfall. |
| Due Date: April 15
What is Due: Your regular Traditional or Roth IRA contribution |
Action that must be taken
Your 2022 regular Traditional IRA or Roth IRA contribution must be made by April 15, 2023. Your contribution will meet this deadline if it is mailed using an IRS approved delivery service by midnight April 15. For contributions made via ACH or wire, the amount must be received by your IRA custodian by April 15. |
| Due date: May 31
What is Due: Form 5498 statement issued |
Action that must be taken
Your IRA custodian must send you a Form 5498 for 2022 by May 31, 2023. Transactions reported on Form 5498 include IRA contributions, rollover contributions, Roth conversions and recharacterizations. They are also required to send your Form 5498 to the IRS. |
| Due date: September 30
What is Due: Determining if a decedent’s IRA has a designated beneficiary |
Action that must be taken
If you inherited an IRA in 2022, the date of determining whether the IRA has a designated beneficiary is September 30, 2023. Generally, beneficiaries that receive or properly disclaim their entire share before September 30 are not taken into account. |
| Due Date: October 15:
What is Due: IRA recharacterization & return of excess contributions |
Action that must be taken
a) If you made a regular contribution to a Roth/Traditional IRA for 2022 and want to change/recharacterize the type of contribution. b) If you made an excess contribution to your IRA for 2022, you must correct it timely to avoid the amount being subject to a 6% excise tax. The deadline for both is your tax filing due date. If you file your tax return by the deadline, you receive an automatic 6-month extension- to October 15, 2023. |
| Due Date: October 31
What is Due: Provide documentation for qualified trust beneficiary, disabled and chronically ill beneficiaries |
Action that must be taken
If the IRA owner died in 2022, provide documentation to the IRA custodian for qualified trust beneficiaries, and beneficiaries who are eligible designated beneficiaries due to being disabled or chronically ill individuals by October 31, 2023. Qualified trust and eligible designated beneficiary status could be lost if this deadline is missed. |
| Due Date: December 31
What is Due: =>Required minimum distributions (RMD) =>72(t) /Substantially equal periodic payments =>Roth conversions =>Separate accounting |
Action that must be taken |
| RMD: If you reach RMD age by December 31, 2023, you must take an RMD from your non-Roth IRA for 2023. If you reach RMD age in 2022, your RMD for 2022 can be taken by April 1, 2023. If you miss the deadline, you will owe the IRS a penalty on the amount that you did not withdraw by the deadline. | |
| SEPP/72(t) payments: If you are taking distributions under a substantially equal periodic payment (SEPP) program, the amount required to be taken for the calendar year must be withdrawn by December 31. Failure to meet this deadline might result in you owing the IRS a 10% early distribution penalty on all amounts taken under the program plus IRS-assessed interest. | |
| Roth conversions for 2023: The assets must leave your traditional IRA or employer plan by December 31, 2023. | |
| Establish separate accounts when there are multiple designated beneficiaries: If an IRA owner died in 2022 and has multiple designated beneficiaries, the age of the oldest beneficiary is used to calculate life expectancy RMDs. Each eligible beneficiary to use their own life expectancy, by establishing separate accounts by December 31, 2023. | |
| This calendar provides high-level explanations. Please contact our office to discuss your IRA transactions. | |
